S&P rates Six Flags loan add-on B+

Standard & Poor's said it assigned its B+ senior secured bank loan rating, the same level as the corporate credit rating, to Six Flags Theme Park Inc.'s $130 million increase to its existing $600 million term loan B due 2009.

Proceeds of the increased term loan have been used to redeem the remaining $122.5 million of parent Six Flags Inc.'s 9.75% senior notes due 2007.

At the same time, S&P assigned its recovery rating of 2 to the company's entire $1.13 billion bank credit facility, indicating substantial recovery of principal (80%-100%) in the event of a default. S&P also affirmed its ratings, including its B+ corporate credit rating, on the company.

The outlook remains negative.

S&P said the rating reflects Six Flags' high debt leverage, currently depressed profitability, and S&P's expectation that the company will report slightly negative discretionary cash flow for 2003. Sources of cash flow pressure in 2003 included 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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