Moody's rates Carmike bonds B2, revolver Ba2

Moody's Investors Service said it assigned a B2 rating to the proposed $210 million second-lien bonds of Carmike Cinemas, Inc. and a Ba2 rating to the company's proposed $25 million first-lien revolver.

The agency said it also affirmed Carmike's B2 corporate family rating and stable outlook.

The proposed debt structure increases operating flexibility compared to the existing credit agreement, and Moody's said it expects management to pursue a more growth oriented approach, a departure from its focus on debt reduction over the past several years.

The agency said this new strategy elevates risk somewhat, but Moody's expects the company to maintain a credit profile appropriate for the B2 corporate family rating.

Moody's said it also assigned an SGL-1 speculative grade liquidity rating to Carmike.

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