Moody's: Kerasotes outlook negative

Moody's Investors Service said it affirmed the B2 corporate family and probability-of-default ratings and B1 (LGD3, 36% from 37%) senior secured bank rating of Kerasotes Showplace Theaters LLC following the extension of the maturity of its revolving credit facility to March 2011 from September 2010, but changed the outlook to negative.

Kerasotes faces significant term loan amortization beginning in March 2011, which, along with its revolver maturity, poses considerable refinancing risk, the agency said.

The B2 corporate family rating reflects high financial risk, sensitivity to product from movie studios, lack of scale, a weak industry growth profile and concerns that the company's aggressive expansion has not yielded desired returns, the agency noted.

Attractive concession margins, a strong competitive position in its targeted mid-size markets and an improving asset base support the ratings, Moody's said.

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