S&P Global Ratings downgraded AMC Entertainment Holdings Inc.'s issuer credit rating to CCC- from B, citing theater closures due to the coronavirus outbreak.
The rating agency expects AMC Theatres to remain closed beyond June due to the impact of the coronavirus and does not believe the company has sufficient sources of liquidity to cover its expected negative cash flows.
S&P expects the company to breach its 6x net senior secured leverage covenant when tested on Sept. 30, absent a waiver from its lenders.
The outlook on the company is negative, reflecting the rating agency's expectation that there could be a liquidity shortfall within the next six months, absent some form of incremental financing.
The outlook also reflects the potential for a distressed debt exchange over the next six months.
This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings.