Moody's cuts Carmike loan to B2

Moody's Investors Service said it lowered the bank rating for Carmike Cinemas, Inc. to B2 from B1 following the repayment of Carmike's $150 million of senior subordinated notes with incremental bank debt.

Given the elimination of junior capital, the bank lenders no longer benefit from the cushion that previously supported a bank credit facility rating higher than the corporate family rating. Moody's also withdrew the Caa1 rating on the senior subordinated notes.

Carmike did not file its 10-K by June 2 and did not receive the required consents to obtain a waiver of the default under these notes. Carmike attained the necessary amendments to its existing secured bank credit facility and funded the $156 million repayment of the subordinated notes (including accrued interest) with its $185 million delayed-draw term loan. The remaining portion of the delayed draw term loan will be canceled.

The ratings remain on review for downgrade based on continuing concerns over weak financial reporting, the agency said.

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