AMC Networks (AMC Global Media) · AMCX
PUBLIC DATA CASEHYPOTHETICAL INVESTMENT TERMSHOLDReturn analysis — 10.50% Senior Secured Notes due 2032
HYPOTHETICAL INVESTMENT TERMSUNDERWRITING ASSUMPTION| Base Case | Downside | Severe Downside | Expected | |
|---|---|---|---|---|
| Outcome | Performing | Performing | Default (LTM Jun-29E) | |
| Face value (legal claim) | $100.0M | $100.0M | $100.0M | |
| Purchase price → cash investment | 95.0 → $95.0M | 95.0 → $95.0M | 95.0 → $95.0M | |
| Cash interest received | $31.5M | $31.5M | $31.5M | |
| Exit price (performing) / recovery proceeds (default) | 100.0 → $100.0M | 81.3 → $81.3M | $34.9M | |
| Capital gain / (loss) vs purchase price | $5.0M | ($13.7M) | ($60.1M) | |
| Total cash proceeds | $131.5M | $112.8M | $66.4M | |
| Valuation recovery % · loss given default | 100% · 0% | 61% · 39% | 34% · 66% | |
| Absolute profit | $36.5M | $17.8M | ($28.6M) | |
| MOIC | 1.38x | 1.19x | 0.70x | 1.18x |
| IRR (annual periods) | 12.6% | 6.5% | -10.8% | 6.1% |
| IRR (contractual timing, 2x/yr coupons) | 12.9% | 6.7% | -11.1% | 6.3% |
| Scenario probability | 45% | 35% | 20% | |
| Required return (hurdle IRR) → status | PASS 12% | FAIL 12% | FAIL 12% | FAIL |
Expected column = IRR of the probability-weighted cash flows (6.1%), not the average of scenario IRRs (5.8%); IRR is non-linear. Contractual timing re-times the same coupon dollars to 2 payment(s) per year (settlement on a coupon date, no accrued interest); principal/recovery stay on annual dates. Fees: 0.0% of cost, paid at t=0. Per $100M face. Timing: coupons at period ends; default → recovery cash 1 period after the default period; performing exit at the hold period at the lesser of the scenario exit-price cap and valuation coverage at the exit multiple. Floating coupons include the scenario rate shock. Scenario weights 45% / 35% / 20%.
Sensitivity analysis — where is the risk / return attractive?
Sensitivity 1 — Purchase price vs IRR
| Purchase price (% of face) | Base Case | Downside | Severe Downside |
|---|---|---|---|
| 87.0 | 16.3% | 10.1% | -8.3% |
| 91.0 | 14.4% | 8.3% | -9.6% |
| 95.0 | 12.6% | 6.5% | -10.8% |
| 99.0 | 10.9% | 4.9% | -12.0% |
| 103.0 | 9.3% | 3.4% | -13.0% |
Sensitivity 2 — Exit / recovery value (% of face) vs IRR
| Proceeds (% of face) | Base Case | Downside | Severe Downside |
|---|---|---|---|
| 20.0 | -22.0% | -22.0% | -18.9% |
| 40.0 | -10.4% | -10.4% | -8.6% |
| 60.0 | -1.4% | -1.4% | -1.1% |
| 80.0 | 6.1% | 6.1% | 4.8% |
| 100.0 | 12.6% | 12.6% | 9.8% |
Sensitivity 3 — EBITDA margin shift vs IRR (full model re-run)
| EBITDA margin shift | Base Case | Downside | Severe Downside |
|---|---|---|---|
| -4.0 pts | 10.8% | -6.2% | -10.8% |
| -2.0 pts | 12.6% | -2.1% | -10.8% |
| +0.0 pts | 12.6% | 6.5% | -10.8% |
| +2.0 pts | 12.6% | 11.1% | -8.5% |
| +4.0 pts | 12.6% | 11.1% | -3.3% |
Sensitivity 4 — Revenue growth shift vs IRR (full model re-run)
| Revenue growth shift | Base Case | Downside | Severe Downside |
|---|---|---|---|
| -10.0 pts | 12.6% | -2.1% | -10.8% |
| -5.0 pts | 12.6% | 1.0% | -10.8% |
| +0.0 pts | 12.6% | 6.5% | -10.8% |
| +5.0 pts | 12.6% | 11.1% | -9.9% |
| +10.0 pts | 12.6% | 11.1% | -7.2% |
Sensitivity 5 — Interest rate (SOFR) shift vs IRR (full model re-run)
| SOFR shift | Base Case | Downside | Severe Downside |
|---|---|---|---|
| -1.0 pts | 12.6% | 6.5% | -10.8% |
| -0.5 pts | 12.6% | 6.5% | -10.8% |
| +0.0 pts | 12.6% | 6.5% | -10.8% |
| +1.0 pts | 12.6% | 6.5% | -10.8% |
| +2.0 pts | 12.6% | 6.5% | -10.8% |
Sensitivity 6 — Distressed valuation multiple shift vs target-tranche recovery %
| Multiple shift (x EBITDA) | Base Case | Downside | Severe Downside |
|---|---|---|---|
| -2.0x | 96.1% | 53.0% | 34.1% |
| -1.0x | 100.0% | 53.0% | 34.1% |
| +0.0x | 100.0% | 60.6% | 34.1% |
| +1.0x | 100.0% | 72.2% | 38.1% |
| +2.0x | 100.0% | 83.8% | 45.7% |
Sensitivity 7 — Recovery / exit value (% of face) vs MOIC
| Proceeds (% of face) | Base Case | Downside | Severe Downside |
|---|---|---|---|
| 20.0 | 0.54x | 0.54x | 0.54x |
| 40.0 | 0.75x | 0.75x | 0.75x |
| 60.0 | 0.96x | 0.96x | 0.96x |
| 80.0 | 1.17x | 1.17x | 1.17x |
| 100.0 | 1.38x | 1.38x | 1.38x |
Green ≥ hurdle IRR (12%) · amber = positive but below hurdle · red = loss (recovery table: green = full recovery, amber ≥ 60%). Every cell is the same calculation as the Excel Sensitivities tab; margin, growth, rate and multiple tables re-run the entire model (statements → debt → default → recovery → returns).
Return calculator
| Face value (legal claim) | $100.0M |
| Cash investment (face × price × (1 + fees)) | $95.5M |
| Current yield (coupon ÷ price) | 11.1% |
| Cash interest received | $31.5M |
| Exit / recovery proceeds | $100.0M |
| Capital gain / (loss) vs purchase price | $5.0M |
| Total cash proceeds | $131.5M |
| Absolute profit | $36.0M |
| MOIC | 1.38x |
| IRR | 12.4% |