Moody’s rates AMC loan Ba1, notes B2

Moody's Investors Service said it assigned Ba1 and B2 instrument-level ratings to AMC Entertainment Holdings, Inc.'s senior secured term loan and senior subordinated notes issuances, respectively.

Proceeds from the transaction total $1.4 billion, split between a $500 million add-on to the existing term loan B due 2023 and $900 million in senior subordinated notes. The notes will be denominated in both dollars and pounds Sterling due 2026 and 2024, respectively.

Net proceeds, along with cash on hand and other sources, will be used to retire the existing debt at Odeon, fund the acquisition cost of Odeon & UCI Bond Midco Ltd. (B3 stable), and cover fees transaction fees and expenses.

AMC Entertainment, Inc.'s B1 corporate family rating and B1-PD probability of default rating remain unchanged. The outlook remains negative.

Following this transaction, all ratings currently at AMC Entertainment, Inc. will be moved to AMC Entertainment Holdings, Inc.

In 2016, AMC agreed to acquire two major theatre operators, Carmike Cinemas, Inc. (B2 on review for upgrade) and Odeon, for about $1.2 billion each, including the assumption of lease obligations and debt.

Pro forma for the acquisitions and related debt financing, Moody’s expects leverage (debt-to-EBITDA, Moody's adjusted) to be about 5.5 times at the close of the transaction, anticipated at the end of 2016.

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