Wiki · Precedent2022
AMC Entertainment — 2022 Refinancing
AMC Entertainment Holdings, Inc.
Doctrine
Incremental capacity at a senior-secured-leverage-ratio test can support a sponsor-led refinancing without amendment where the borrower's pro-forma leverage clears the test on the most recent reporting date.
Signature move
Incremental tranche raised under SSLR ratio test; proceeds refinance prior secured paper
Narrative
AMC issued approximately $475M of new senior secured paper in 2022 under the incremental facility provisions of its term loan, using the SSLR ratio test rather than the dollar basket. The pro-forma calculation cleared the agreement's 4.25× SSLR threshold based on the most recent reporting date, and proceeds were applied to refinance prior secured obligations.
The transaction is cited as a routine, plain-language application of the incremental ratio test — useful precisely because nothing went wrong, illustrating the standard incremental-debt mechanic in a non-litigated form.
Market impact
Cited as a clean example of the incremental ratio test, particularly useful for explaining the difference between the dollar-basket leg and the ratio leg of an incremental waterfall.
Cited by1 module
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