Moody's rates Movie Gallery loan B1, notes B2

Moody's Investors Services said it assigned first time ratings to Movie Gallery Inc. in connection with its proposed acquisition of Hollywood Entertainment.

More specifically, Moody's assigned Movie Gallery Inc. a B1 senior implied rating, a B1 rating to its $870 million of senior secured credit facilities and a B2 rating to its $325 million of guaranteed senior notes. The issuer rating is B3, and the speculative grade liquidity rating is SGL-2.

Moody's also confirmed Hollywood Entertainment's B1 senior implied rating, Ba3 rating for its senior secured credit facilities, B3 rating for its senior subordinated notes and B2 issuer rating.

The outlook is stable.

The B1 rating for Movie Gallery reflects the amount of leverage post transaction, low tangible asset coverage and current uncertainty regarding industry dynamics, Moody's said. The rating also considers the good strategic fit of Hollywood Entertainment and Movie Gallery with only 13% crossover in the current store base. The combination of the Movie Gallery and the Hollywood Entertainment franchises will give the company the number two market position behind Blockbuster in a highly fragmented market.

© 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.