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Fitch lowers AMC notes to B-, rates loan BB
Fitch Ratings said it affirmed the issuer default rating of AMC Entertainment, Inc. at B and assigned a BB with a recovery rating of RR1 to the proposed $300 million term loan.
The agency also said it downgraded the senior unsecured notes to B- with a recovery rating of RR5 from B with a recovery rating of RR4.
The outlook is negative.
The downgrade reflects a reduction in recovery prospects as a result of the additional secured term loans issued, Fitch said.
The subordinated note tender is expected to be funded with the $300 million term loan due in 2018, the agency said.
The proceeds from the loan will be used to pay down the existing $141 million term loan balance due January 2013. The term loans will be issued under the existing credit agreement, Fitch said.
While the ratings and outlook remain unchanged, the proposed transaction does improve AMC's maturity profile by extending $160 million of subordinated notes due 2014 and $140 senior secured term loan balance due 2013 to 2018, the agency said.
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