S&P upgrades Regal, debt

S&P said it raised the corporate credit ratings on Regal Entertainment Group and its operating subsidiary Regal Cinemas Corp. by one notch to BB- from B+.

The outlook is stable.

At the same time, the agency upgraded the issue-level rating on the company's senior secured debt to BB+ from BB. The 1 recovery rating is unchanged, indicating an expectation for very high recovery (90%-100%; rounded estimate: 95%) of principal in the event of a payment default.

S&P also raised the issue-level rating on the senior unsecured debt to B+ from B. The 5 recovery rating is unchanged, indicating an expectation for modest recovery (10%-30%; rounded estimate: 10%) of principal in the event of a payment default.

S&P said the upgrade reflects its expectation that Regal's revenue and EBITDA will continue to grow at a low- to mid-single-digit percentage rate, the company will use most of its excess cash flow for theater enhancements, and its leverage will remain at the low-4 times area over the next 12 to 18 months.

The upgrade is also based on the view that the company's financial policy has shifted to place more emphasis on investing cash flow back into the business, while moderating the pace of shareholder returns, the agency explained.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.