Fitch places Cineworld on watch

Fitch Ratings said it placed Cineworld Group plc's long-term issuer default rating of B+ and expected senior secured debt rating BB- on rating watch negative.

“The RWN reflects uncertainties in trading as a result of Covid-19. Social-distancing measures may in a worst-case scenario require cinema closure with significant impact on revenues that Cineworld may not be able to fully mitigate. Under some of our scenarios analyzed, prolonged cinema closures could weaken liquidity and lead to the company breaching its debt covenants. Cineworld retains capex and dividend flexibility that should help it traverse all but the worst-case scenarios without any covenant breach. Cineworld has said so far it has not observed any material impact on movie theatre attendance due to Covid-19,” said Fitch in a press release.

The resolution of the RWN will depend on the severity of the effect on Cineworld's trading particularly in the second quarter, the ability to reduce fixed costs and the pressures on liquidity.

© 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.