Moody’s rates Regal loan Ba1

Moody’s Investors Service said it assigned a Ba1 rating to Regal Entertainment Group’s wholly-owned subsidiary Regal Cinemas Corp.’s proposed senior secured term loan.

The proceeds will be used to repay the existing senior secured term loan outstanding at Regal, Moody’s said.

The transaction will reduce the interest rate spread over Libor from 300 basis points to 275 basis points, resulting in annual interest savings of about $2.5 million, the agency said.

The transaction will not change the amount of absolute debt at Regal, Moody’s explained.

The company’s B1 corporate family rating and stable outlook are unchanged.

The ratings reflect the company’s liberal use of operating cash flow and the constraints imposed by a mature industry experiencing a secular decline in attendance, the agency said.

The company is challenged by a dependence on a limited number of movie studios, an unpredictable box office result and emerging competitive threats, Moody’s said.

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