Fitch rates AMC notes B

Fitch Ratings said it assigned a B rating with a recovery rating of RR5 to AMC Entertainment Inc.’s $600 million senior subordinated note issuance due 2025 in a private offering.

The company’s issuer default rating currently is rated at B+.

The outlook is stable.

AMC recently announced its plans to commence a cash tender offer to redeem all of its outstanding $600 million 9¾% senior subordinated notes due 2020.

The proceeds from the issuance will be used, along with cash on hand, to complete the tender offer, Fitch said.

The agency said it views the transaction as neutral to the company’s credit metrics as it is leverage neutral, the agency said.

Changes in the industry that may allow smaller competitors in certain markets to gain access to more titles and showings could have a negative effect on AMC’s credit metrics, Fitch said.

The risk of potential market share shift to smaller operators is offset by a belief that customers will continue to be drawn by premium seating and concession, which the smaller operators have not been able to invest in to the same extent as AMC, the agency said.

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