S&P affirms AMC Entertainment

Standard & Poor's said it withdrew its ratings on Loews Cineplex Entertainment Corp. following the completion of its merger with AMC Entertainment Inc. and the repayment of all of Loews' debt.

S&P also affirmed AMC's B corporate credit rating, B+ senior secured credit facility with a recovery rating of 1, B- senior unsecured debt rating, CCC+ subordinated debt rating and parent company Marquee Holdings Inc.'s CCC+ senior unsecured debt rating.

The outlooks for AMC and Marquee are negative. Following the merger, AMC had $2.5 billion in debt in addition to $3 billion in present value of operating leases.

S&P said the ratings on AMC incorporate a consolidated view of Marquee and consider the company's high leverage, weak profit margins relative to peers, participation in a highly competitive industry and reliance on the popularity of Hollywood films.

These risks are partially offset by the company's modern theater circuit relative to other major theater chains, its large and geographically diverse U.S. operations and some international diversity, the agency said.

The merger should strengthen the already solid competitive profile of the combined companies in large metropolitan U.S. markets, enhance profitability through cost reductions and scale advantages and allow for better coordination of assets and capital spending, S&P added.

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