Fitch Rates AMC’s Proposed Credit Facility BB/RR1
Fitch Ratings said it has assigned a rating of BB/RR1 to AMC Entertainment’s recently announced new senior secured credit facility. The facility will be comprised of a $150 million revolver maturing in 2018 and a $775 million term loan maturing in 2020. The proceeds will be used to refinance $760 million of existing term loans that mature in 2016 and 2018.
Fitch said it views the transaction favorably as the transaction will benefit AMC’s intermediate maturity schedule by extending the term loan maturities to 2020. Fitch also expects slightly lower pricing resulting in lower annual interest costs. The company pays LIBOR plus 3.25% (with 1% LIBOR floor) on the term loan due 2016 and LIBOR plus 3.75% (with 1% LIBOR floor) on the term loan due 2018.
The current revolver has a borrowing capacity of $192.5 million. While the borrowing capacity of the proposed revolver would be lower than the current facility, Fitch said it is comfortable with AMC’s liquidity level.