S&P lowers Hollywood Theaters

Standard & Poor's said it lowered its corporate credit and issue-level ratings on Hollywood Theaters Inc. by two notches.

The corporate credit rating was lowered to CCC from B-, and the outlook is negative, the agency said.

"We lowered the ratings because of concerns about Hollywood's ability to refinance $118 million of debt obligations prior to its maturities in July 2009 given current credit market conditions," said S&P credit analyst Jeanne Mathewson.

"In addition, the company may violate financial covenants, and we are concerned about its ability to get an amendment or waiver."

The rating reflects Hollywood Theaters' risk surrounding its substantial near-term maturities, high leverage, concentrated cash flow, and potential for covenant violations, S&P said.

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