Moody's upgrades AMC

Moody's Investors Service said it upgraded AMC Entertainment Inc.'s corporate family rating to B1 from B2, probability of default rating to B1-PD from B2-PD, backed senior subordinated notes due 2020 and 2022 to B2 (LGD5) from B3 (LGD5), senior subordinated notes due 2025 to B2 (LGD5) from B3 (LGD5) and senior secured first-lien credit facilities due 2018 and 2020 to Ba1 (LGD2) from Ba2 (LGD2) and affirmed the speculative grade liquidity rating at SGL-2. The outlook is stable.

These actions conclude the review for upgrade that began on June 16 upon the adoption of Moody's updated approach for standard adjustments for operating leases.

The agency said the upgrade reflects a meaningful improvement in leverage, which has fallen steadily and substantially, and the company’s high market share, leading returns on its asset base and strong cash flows.

AMC's B1 corporate family rating incorporates the company's liberal use of operating cash flow and the constraints imposed by a mature industry experiencing a secular decline in attendance, Moody’s said.

Despite these challenges, the company is one of the four largest operators in the United States and benefits from barriers to entry and good liquidity, the agency said.

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