Moody's lifts Cinemark

Moody's Investors Service said it upgraded Cinemark USA, Inc.'s corporate family rating to B2 from B3, probability of default rating to B2-PD from B3-PD, senior secured debt ratings to Ba2 from Ba3, and senior unsecured notes to B3 from Caa1. The speculative grade liquidity rating remains unchanged at SGL-2. The agency revised the outlook to stable from positive.

“The ratings upgrade reflects Moody's expectation that Cinemark will increase EBITDA, demonstrate improved credit protection measures and generate $100 million - $120 million of free cash flow (FCF) in 2023 (assuming no dividend payments). The upgrade also recognizes the company's sensible debt capital structure and financial policies given that new theatrical release volumes and North American box office receipts are expected to remain below the cinema industry's pre-pandemic peak,” the agency said in a press release.

The revised outlook reflects the view that Cinemark will continue to benefit from good moviegoer demand, higher average ticket prices per patron, and a greater proportion of higher margin concessions revenue, which will support organic revenue growth and widen EBITDA margins over the course of the year, Moody’s said.

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