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S&P rates new Six Flags notes B-
Standard & Poor's said it assigned its B- rating to Six Flags Inc.'s privately placed, Rule 144A $300 million senior notes due 2014 and affirmed the company's other ratings, including its B+ corporate credit rating.
Proceeds from the offering will be used to redeem about $280 million of its $423 million 9.75% senior notes due 2007.
The outlook remains negative.
S&P said the rating reflects Six Flags' high debt leverage, currently depressed profitability, and S&P's expectation that discretionary cash flow will be slightly negative in 2003. Net cash usage is likely, despite lower capital spending, due to reduced profitability and the heavy interest expense and preferred dividend burden.
These risks are only partly offset by the company's good competitive position in the regional theme park business, and good geographic and cash flow diversity.
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