Fitch rates Regal Entertainment notes B-/RR6

Fitch Ratings said it assigned a B-/RR6 to the Regal Entertainment Group's $190 million 6.25% convertible senior notes due 2011. The company has an issuer default rating at B+ and senior unsecured convertible notes at B-/RR6.

The issuer expects to grant buyers an option for an additional $20 million of the notes.

Proceeds are expected to be used to repurchase or repay the 3.75% convertible senior notes due 2008 and for general corporate purposes.

Regal Cinemas has an issuer default rating at B+, senior secured facility at BB/RR2 and senior subordinated notes at B/RR5.

Ratings reflect the company's size and position as a leading theater exhibitor, solid geographic diversity, sound operating performance and relatively stable free cash flow generation, the agency said.

These strengths are balanced by the risks associated with collapsing film distribution windows, increased competition from at-home entertainment media, high operating leverage and a history of aggressive dividend payouts, Fitch said.

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