Fitch affirms Marquee, AMC

Fitch Ratings said it affirmed the B issuer default ratings of Marquee Holdings Inc. and its principal operating subsidiary AMC Entertainment, Inc. as well as Marquee's CCC/RR6 senior discount notes and AMC's BB/RR1 senior secured credit facilities, B/RR4 senior unsecured notes and CCC+/RR6 senior subordinated notes.

The outlook is stable.

The agency said the ratings are supported by AMC's critical mass and competitive positioning as the second-largest domestic movie exhibitor and Fitch's expectation that, given the high percentage of existing megaplexes, AMC will continue to modernize in a disciplined fashion and has some flexibility in terms of scaling back in a downturn.

Rating concerns include AMC's significant debt load despite the meaningful reduction of $600 million in senior and subordinated notes following the public offering of joint venture National CineMedia, Inc., AMC's significant operating lease commitments related to its theater circuit and current and prospective challenges facing the movie exhibitor industry, including increasing indirect competition from other distribution channels, a shrinking release window and the concentrated base of film distributors, the agency said.

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