Fitch to rate AMC loan CCC

Fitch Ratings said it expects to assign CCC/RR6 ratings to AMC Entertainment Holdings, Inc.'s new $400 million senior unsecured term facility and its potential $275 million senior unsecured facility.

The agency also affirmed Marquee Holdings Inc.'s B issuer default rating and CCC/RR6 senior discount notes and AMC Entertainment Inc.'s B issuer default rating, BB/RR1 senior secured credit facilities, B/RR4 senior unsecured notes and CCC+/RR6 senior subordinated notes.

The outlook is stable.

Proceeds from the new $400 million loan will be used to fund a dividend payout to Marquee's current shareholders. Marquee has also announced a consent solicitation to amend the indenture of its existing discount notes due 2014 to accommodate a dividend payment of up to $275 million prior to the next accretion date on Aug. 15.

The agency said it believes AMC and Marquee have sufficient financial flexibility at the current rating to fund the additional debt service payments due to the recent debt reduction, solid operating performance and expectations for a continued strong box office performance for the remainder of the summer season.

In March, the company allocated all proceeds from the National CineMedia initial public offering and $109 million in cash toward debt repayment and fully redeemed $600 million of its higher-coupon operating company notes. Therefore, while the proposed transaction will result in higher consolidated debt levels, Fitch noted that the new debt does not affect the default probability and recovery expectations of the operating company debt ranked higher in the capital structure.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.