Moody's cuts Cineworld

Moody's Investors Service said it downgraded Cineworld UK Holdco Ltd.'s corporate family rating to B3 from B1 and the probability of default rating to B3-PD from B1-PD. Concurrently, Moody's downgraded to B3 from B1, the ratings of the $3.375 billion and the €212 million of senior secured term loan borrowed by Cineworld Finance US, Inc. and the $462.5 million senior secured revolving credit facility borrowed by Cineworld UK Holdco Ltd.

The two-notch rating downgrade was triggered by the temporary closures of all of Cineworld's cinema theaters in the U.S and Europe. National governments mandated the closures to help curtail the widespread outbreak of coronavirus across the globe.

"Moody's adjusted gross leverage for Cineworld was already high at around 5.5x at the end of 2019 and we now expect it to rise towards or above 6.5x in 2020. We also expect the company to heavily rely on its revolving credit facility for its cash needs during the year," said Gunjan Dixit, a Moody's vice president, senior credit officer and lead analyst for Cineworld, in a press release.

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