Moody's rates Cedar Fair loan Ba3, Siddur notes B3

Moody's Investors Service said it assigned a Ba3 rating (LGD3, 31%) to Cedar Fair, LP's proposed $1.25 billion senior secured credit facility due 2014 and a B3 rating (LGD5, 85%) to Siddur Merger Sub, LLC's proposed $700 million senior unsecured notes due 2018.

The agency also assigned Cedar Fair prospective B1 corporate family and probability-of-default ratings. The ratings reflect the $2.4 billion acquisition of the company by Apollo Global Management announced on Dec. 16, Moody's said.

Cedar Fair's existing Ba3 corporate family rating remains on review for downgrade.

Proceeds from the debt offerings along with a contribution from Apollo will be used to fund the acquisition and refinance debt.

The prospective downgrade reflects the modestly higher leverage from the acquisition and exposure to event risk and more aggressive financial policies under sponsor ownership, according to the agency.

Cedar Fair's B1 corporate family rating reflects good operating cash flow and strong EBITDA margins, supported by an experienced management team and high entry barriers, the agency said.

These strengths are tempered by exposure to cyclical discretionary consumer spending, competition and pro forma debt-to-EBITDA leverage of 5.4x for the 12 months ended Sept. 30, the agency said.

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