S&P lifts Hollywood Theaters

Standard & Poor's said it raised the corporate credit rating on Hollywood Theaters Inc. to B- from CCC on holding company parent Wallace Theater Holdings Inc. to B- from CCC, and removed the rating from CreditWatch, where it was placed with developing implications June 2.

The outlook is stable.

"The ratings upgrade reflects our reassessment of the company's creditworthiness following its completion of its issuance of $157 million of senior secured notes," S&P analyst Jeanne Mathewson said in a statement.

Proceeds will be used to refinance the existing $137.8 million of debt at Hollywood.

Other factors affecting the rating include the mature and highly competitive nature of the industry and the company's exposure to the fluctuating popularity of movies, the agency said.

The rating also reflects concern that proliferation of competing entertainment alternatives and shorter periods in theatrical release could pressure attendance trends over the long run, S&P noted.

Lease-adjusted leverage was about 6.9x for the 12 months ended March 31 and about 9x when including debt-like preferred stock.

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