S&P may cut Hollywood Entertainment

Standard & Poor's said its ratings for Hollywood Entertainment Corp., including the B+ corporate credit rating, BB- bank loan rating, and B- subordinated debt rating, remain on CreditWatch with negative implications.

The ratings were initially placed on CreditWatch March 29 when Hollywood had announced it entered into a definitive merger agreement to be acquired by an affiliate of Leonard Green & Partners LP.

This CreditWatch update follows the announcement that Leonard Green & Partners has informed Hollywood Entertainment that it believes the financing condition to consummate the merger will not be satisfied due to industry and market conditions.

Hollywood and a special committee of its board of directors are considering the company's alternatives to determine the course of action that would be in the best interest of shareholders.

S&P said it will review any proposed transaction and its impact on the company's credit quality.

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