Moody's affirms Carmike

Moody's Investors Service said it affirmed the B2 corporate family and probability-of-default ratings, and B1 (LGD2, 29%) senior secured bank rating for Carmike Cinemas, Inc.

The outlook remains negative, reflecting concerns about tightening financial maintenance covenants and continued fundamental weakness, including EBITDA margins below peers, which may prevent Carmike from achieving the targeted low-6x debt-to-EBITDA leverage required to sustain a B2 corporate family rating, according to the agency.

The outlook is negative.

The B2 corporate family rating continues to reflect Carmike's high leverage, above-average sensitivity to film product from movie studios and lack of scale, as well as a weak industry growth profile, the agency said.

The company's dominant position in its targeted smaller markets, strong concession margins and adequate liquidity support the rating, Moody's said.

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