S&P drops Carmike outlook to negative

Standard & Poor's said it revised its outlook on Carmike Cinemas Inc. to negative from stable.

At the same time, the agency said it affirmed its ratings on the company, including the B- corporate credit rating.

According to S&P, the outlook revision reflects the negative impact of poor third-quarter box office performance on Carmike's EBITDA, credit measures, and cushion of compliance with its leverage covenant.

As of Sept. 30, Carmike had a very slim 6% EBITDA cushion against its leverage covenant, the agency said, noting that it expects leverage could come down over the next quarter, based on strong October box office results and Carmike's continued efforts to prepay debt.

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