S&P cuts SeaWorld Parks, rates new loan BB-

Standard & Poor's said it lowered its corporate credit rating on SeaWorld Parks & Entertainment Inc. to B+ from BB-. The outlook is stable.

In addition, the agency said it lowered the issue-level rating on the company's senior secured credit facility to BB from BB+, placing the issue-level rating on CreditWatch with negative implications.

The recovery rating remains a 1. However, upon closing of the proposed transaction, the agency said it would revise the recovery rating on the existing senior secured credit facility to 2 and lower the issue-level rating to BB-, in accordance with S&P's notching criteria.

At the same time, the agency said it assigned its preliminary BB- issue-level rating to SeaWorld's proposed $500 million incremental term loan B. The preliminary recovery rating is 2, indicating an expectation of substantial recovery for lenders in the event of a payment default.

"The downgrade reflects the expected spike in adjusted leverage to over 5x following the proposed transaction from around 4x at Dec. 31, 2011," said S&P credit analyst Ariel Silverberg in a news release, "and our expectation that leverage will remain around 5x over the intermediate term, in line with the B+ rating."

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