Moody's upgrades Movie Gallery rating
EmptyNEW YORK -- Credit-ratings agency Moody's Investors Service on Friday upgraded its rating of Movie Gallery Inc.'s $100 million senior secured credit facility to "B1" from "B2" and affirmed all its other ratings following a change in the company's credit facility.
Earlier Friday, Movie Gallery said it completed the refinancing of an existing $900 million senior secured credit facility and expects the new credit facility to result in more than $6 million of annual cash interest savings.
Moody's said its "Caa1" corporate family rating on the company's $175 million senior secured second lien term loan reflects the company's eroding competitive position of its Hollywood Entertainment subsidiary and very weak credit metrics, along with the numerous threats the home video rental industry faces.
"The company has very little financial flexibility as result of the high leverage it incurred in order to finance its acquisition of Hollywood Entertainment in early 2005," Moody's said in a statement.
Shares of Movie Gallery rose 10 cents, or 2.1%, to $4.89 in afternoon trading on the Nasdaq Stock Market.