Fitch rates Regal loans BB, notes B, convertibles B-

Fitch Ratings said it assigned B+ issuer default ratings to Regal Entertainment Group and Regal Cinemas Corp., BB/RR2 ratings to Regal Cinemas' $1.7 billion senior secured term loan facility due 2013 and up to $100 million senior secured revolving credit facility due 2011, which has a $30 million letter-of-credit sublimit; a B/RR5 rating to its 9 3/8% senior subordinated notes and a B-/RR6 rating to Regal Entertainment's $240 million senior unsecured convertible notes.

The outlook is stable.

The agency said the ratings reflects the company's size and position as a leading theater exhibitor, solid geographic diversity, sound operating performance and relatively stable free cash flow generation. Fitch noted that the company is the only major exhibitor in over 85% of the film distribution zones in which it operates.

These strengths are balanced by the intermediate-term risks associated with collapsing film distribution windows, increased competition from at-home entertainment media, heavy reliance upon a limited number of film distribution companies, limited control over revenue trends, high operating leverage that can make theater operators free cash flow-negative in a downturn and a history of aggressive dividend payouts, Fitch said.

The total debt-to-operating EBITDAR ratio at the Regal Entertainment level was 3.6x at Sept. 28.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.