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Published on 9/20/2018 in the Prospect News Bank Loan Daily, Prospect News Convertibles Daily and Prospect News High Yield Daily.

Fitch affirms AMC Entertainment

Fitch Ratings said it affirmed the long-term issuer default rating of B on AMC Entertainment Holdings, Inc.

The outlook is stable.

The affirmation follows AMC's announcement that it has closed on a $600 million strategic investment from private equity firm Silver Lake in the form of 2.95% convertible senior unsecured notes, the agency said.

Fitch said it views the transaction as a credit negative.

Management's aggressive financial policy is evidenced by its tolerance to increase leverage to fund the repurchase of 24 million class B common shares from Dalian Wanda Group Co., Ltd. and a $160 million special dividend to shareholders, the agency added.

“Notably, the incremental cash interest from the new convertible notes ($18 million) will be offset by reduced cash dividend payments to Wanda resulting from the share repurchase. As such, the impact to FCF will be neutral,” Fitch said in a news release.


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