S&P keeps Cinemark on watch, gives loan B

Standard & Poor's said its ratings, including the B+ corporate credit ratings, on Cinemark Inc. and subsidiary company Cinemark USA Inc., which are analyzed on a consolidated basis, remain on CreditWatch with negative implications because of the pending debt-financed acquisition of Century Theatres Inc. (B+/negative).

After the transaction is completed, the agency said it will lower the ratings, including lowering the corporate credit rating to B from B+ and assign a stable outlook.

The downgrade will be based on the increased credit risk from the proposed acquisition and the agency's concerns about rising industry risk.

S&P said it will also lower the ratings on the company's senior subordinated notes and senior discount notes to CCC+ from B-.

The agency added it assigned a B rating to Cinemark USA Inc.'s proposed $1.27 billion bank loan facility, the same as the post-acquisition corporate credit rating, with a 2 recovery rating.

The ratings on Cinemark reflect the company's high lease-adjusted leverage and financial risk, the mature and highly competitive nature of the U.S. motion picture exhibition industry and exposure to the fluctuating popularity of Hollywood films, S&P noted.

© 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.