S&P lowers SeaWorld Parks

Standard & Poor’s said it lowered the corporate credit rating on SeaWorld Parks & Entertainment Inc. to BB- from BB.

The outlook is negative.

The agency also said it lowered the rating on the company’s $1.6 billion senior secured credit facility to BB from BB+, in line with the lower corporate credit rating.

The 2 recovery rating on this debt is unchanged, reflecting 70% to 90% expected default recovery.

The downgrade reflects a revised forecast for 2014 EBITDA to decline about 15% before stabilizing in 2015, S&P said, and an expectation that debt-to-EBITDA will increase to the mid-4x range in 2014 and remain at this level in 2015, S&P said.

Although inclement weather and school calendars contributed to a portion of the operational weakness, the agency said it believes that the more significant and ongoing drivers are negative media reports that have specifically targeted the company’s use of Orca whales for entertainment purposes.

Revenues, driven by lower attendance and per capita spending, will remain weak through the remainder of the year, S&P said.

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