S&P drops AMC view to negative

Standard & Poor's said it revised its outlook on AMC Entertainment Inc. and its parent company, Marquee Holdings Inc., to negative from positive.

At the same time, the agency said it affirmed its existing ratings on AMC and Marquee, including the B corporate credit ratings.

S&P said the outlook revision on AMC resulted from the steep drop in U.S. movie attendance in second quarter, which has resulted in sharply lower profitability and cash flow for the company.

The agency added the rating on AMC reflects concern about the company's very high leverage, its heavy reliance on expensive lease financing, its weak EBITDA margins and the difficult industry operating environment.

These concerns are only partially offset by AMC's large size and most up-to-date theater circuit, the agency said.

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