Moody's cuts Regal

Moody's Investors Service said it downgraded Regal Entertainment Group's corporate family and probability of default ratings to B1 from Ba3. Its subsidiary Regal Cinemas Corp.'s senior secured bank credit facility was downgraded to Ba3 (LGD3, 32%) from Ba2 (LGD3, 30%) and senior unsecured regular bond/debenture rating to B2 (LGD5, 83%) from B1 (LGD5, 80%).

The outlook was changed to stable from negative.

The action was prompted by gradually deteriorating coverage measures and expectations that Regal will continue to record relatively nominal levels of free cash flow, Moody's said.

Regal's cash flow stream is recession-resistant, the agency said, and this partially offsets risks related to the relatively small scale of free cash flow. Regal's generally solid liquidity position also is a positive rating consideration, Moody's said.

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