Moody's lowered AMC Entertainment Holdings Inc.'s corporate family rating to Caa1 from B3 and the probability of default rating to Caa1-PD from B3-PD.
Concurrently, the rating agency downgraded AMC Entertainment's senior secured credit facilities to B3 from Ba3 and $2.3 billion of senior subordinated notes to Caa2 from Caa1.
The senior secured debt was lowered on the expected recovery value of the debt instruments because of various uncertainties and challenges AMC is facing over the short term and the economic impact from COVID-19 on AMC's cash flows and liquidity.
Moody's also assigned a B3 rating to the proposed $500 million first-lien notes offering.
The outlook on AMC Entertainment is negative, reflecting Moody's expectation for lower revenue and EBITDA this year along with weakened liquidity as a result of temporary closures of the company's theater circuit.
The company earlier said it has a sufficient cash balance to withstand a suspension of operations until a partial reopening in July. As of March 31, AMC had a cash balance of $299.8 million, including borrowings in March.