Moody’s downgrades Vue

Moody's Investors Service said it downgraded to B3 from B2 the corporate family rating and to B3-PD from B2-PD the probability of default rating of Vue International Bidco plc.

The agency also downgraded to B3 from B2 the ratings on Vue's €360 million senior secured floating-rate notes due 2020 and the £300 million senior secured notes due 2020.

The outlook is stable.

The agency said the actions follow weak third quarter results and the announcement that Vue has agreed to acquire CineStar in Germany at leverage levels which are not considered to be consistent with a B2 rating.

“The downgrade to B3 reflects our view that the debt-financed CineStar acquisition comes at a time when Vue's leverage is already elevated at 7x, as a result of weak European markets in 2018, and also at a time of approaching debt maturities,” Colin Vittery, Moody's vice president, senior credit officer and lead analyst for Vue, said in a news release.

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