Moody’s gives SeaWorld loans B1

Moody's Investors Service said it assigned a B1 rating to SeaWorld Parks & Entertainment, Inc.'s proposed $400 million five-year term loan B-4 and $400 million seven-year term loan B-5.

The new five-year revolver was also assigned a B1 rating.

SeaWorld's B1 corporate family rating and stable outlook are unchanged.

Proceeds from the proposed term loan B-4 and B-5 will be used to refinance about $544 million of the $1.328 billion term loan B-2 and all of the $246 million term loan B-3 as well as pay transaction expenses. The transaction is expected to increase debt by $10 million and extend out a portion of its debt schedule to 2022 and 2024 from 2020. The rating on the term loan B-3 will be withdrawn upon repayment.

SeaWorld's B1 corporate family rating reflects the portfolio of twelve regional and destination theme and water parks. The leverage level of 6.1 times as of Q3 2016 (including Moody's standard lease adjustments) is very high for the rating, although the agency said it expects improvements in adjusted EBITDA due to reduced expenses as well as modest debt repayment to reduce leverage over the next 12 months.

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