Moody’s changes AMC view to negative

Moody's Investors Service said it affirmed the B1 corporate family rating of AMC Entertainment Inc. and changed the outlook to negative from stable.

The agency also affirmed AMC's B1-PD probability of default rating, Ba1 senior secured rating and B2 senior subordinated rating.

The action follows AMC’s announcement to purchase Odeon & UCI for $1.2 billion (excluding fees and other transaction costs) funded with a combination of cash and stock. The purchase price values the company at roughly 9.1 times EV/EBITDA.

AMC is expected to issue about $1.2 billion of debt to execute the deal including a $525 million term loan B and $675 million subordinated bridge loan. The existing debt at Odeon will be retired at close, scheduled for the fourth quarter of 2016.

While the transaction is subject to customary regulatory review and approvals, Moody’s said it believes there is high probability the deal will close as planned.

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