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S&P rates Regal add-on BB
S&P said it assigned a BB rating and 1 recovery rating to Regal Entertainment Group's proposed $150 million add-on to its senior secured term loan due 2022.
The 1 recovery rating indicates 90% to 100% expected default recovery.
The rating is two notches higher than the company's B+ corporate credit rating.
The borrower is Regal Cinemas Corp.
The agency said the company also is seeking to reprice its senior secured credit facilities to reduce its margin of interest by 50 basis points.
Including the add-on, the repriced facilities will consist of a $1.1 billion term loan B due 2022 and an $85 million revolver due 2020.
The transaction should increase leverage by about 0.1x from 4.0x as of May 31, which will not have a material impact on the company's credit ratios, S&P said.
The proceeds will be used for general corporate purposes, which could include tuck-in acquisitions, the agency said.
The ratings and stable outlook are not affected by the proposed transaction.
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