Wiki · Precedent2021
AMC Entertainment — 2021 Equity-NCP Repurchase
AMC Entertainment Holdings, Inc.
Doctrine
Equity issuance proceeds funneled through the builder basket can be applied to convertible-note repurchases without restricted-debt-payment limitations, where the agreement's Available Amount construction includes Net Cash Proceeds of equity issuances.
Signature move
Meme-driven equity issuance feeds builder basket; proceeds used to repurchase convertibles
Narrative
AMC raised approximately $1.6B of common equity during the 2021 'meme stock' window. Under its 2019 term loan, equity issuance Net Cash Proceeds added to the Available Amount, expanding builder-basket restricted-payment capacity. AMC subsequently repurchased a portion of its 2026 convertible notes using that capacity.
No lender challenge resulted. The transaction is cited as a clean example of the builder-basket mechanic working in a borrower-favorable direction without litigation, and as a reminder that equity-issuance NCP can become a meaningful component of restricted-payment capacity in the right market window.
Market impact
Standard reference for the equity-NCP component of the builder basket. Notable for being a non-distress example — most builder-basket transactions are studied through the lens of what went wrong, but AMC '21 worked exactly as drafted.
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