S&P Downgrades Cinemark Credit Rating to ‘Highly Speculative’
Standard & Poors Global Ratings on Monday downgraded Cinemark’s credit rating to B+ from BB-, putting the theater operator’s borrowing power at “highly speculative.” Cinemark reported a loss of $170 million for its most recent second quarter. The theater chain said it had $571 million of cash on hand as of June 30, with a cash burn at roughly $50 million per month. Cinemark began reopening some of its theaters late last month and will continue to reopen theaters later this week. “We continue to believe Cinemark will have more than sufficient liquidity to fund its operations until theaters return to normalized attendance, but we now expect the company’s leverage to remain above our 4x downgrade threshold through 2021,” S&P analysts wrote in a note. “Attendance will not return close to 2019 levels until a vaccine or treatment has been developed and social distancing is no longer required. We now expect leverage to remain above 4x through year-end 2021 and cash flow will remain thin after factoring in deferred lease payments.” Also Read: S&P Raises AMC Theatres Credit Rating From 'Selective Default,' Maintains Negative Outlook S&P kept Cinemark on a negative credit watch, but said it intends to resolve the...
Read original story S&P Downgrades Cinemark Credit Rating to ‘Highly Speculative’ At TheWrap
