By Sara Rosenberg
New York, July 21 - Six Flags Inc.'s recently proposed amendment would revise credit facility spreads as well as financial covenants, according to an 8-K filed with the Securities and Exchange Commission Friday.
Under the amendment, pricing on the company's term loan and revolver will be based on a new leverage grid. If leverage is greater than 3 times, pricing will be Libor plus 275 basis points; if leverage is greater than 3.5 times, pricing will be Libor plus 300 bps; if leverage is greater than 4 times, pricing will be Libor plus 325 bps and if leverage is greater than 4.25 times, pricing will be Libor plus 350 bps.
In addition, if the company's ratings are downgraded, the pricing grid will increase by 25 bps.
Other terms of the amendment include waiving second quarter 2006 financial covenants, modifying the consolidated leverage, debt service and interest coverage covenants through fourth quarter 2007 (see table) and removing the consolidated fixed-charge coverage covenant through fourth quarter 2007.
Furthermore, the amendment would add a maximum capital expenditures covenant of $120 million for 2007 and offer asset sale proceeds to term loan lenders.
A lender call for the amendment was held on July 18 and consents are due by 5 p.m. ET on July 28.
Lenders will receive a 25 bps fee for consenting prior to the deadline.
The amendment is expected to be finalized on July 31.
Six Flags is a New York-based regional theme park company.
Table: Consolidated Leverage, Interest Coverage and Debt Service Covenants
| Fiscal Quarter | Leverage Ratio | Interest Coverage Ratio | Debt Service Coverage Ratio
|
| Existing | Proposed | Existing | Proposed | Existing | Proposed
|
| Q3 | 2006 | 3.00x | 4.50x | 4.00x | 2.50x | 3.50x | 2.00x
|
| Q4 | 2006 | 3.00x | 4.50x | 4.00x | 2.50x | 3.50x | 2.00x
|
| Q1 | 2007 | 2.50x | 4.50x | 4.00x | 2.50x | 3.50x | 2.00x
|
| Q2 | 2007 | 2.50x | 4.00x | 4.00x | 2.75x | 3.50x | 2.25x
|
| Q3 | 2007 | 2.50x | 3.75x | 4.00x | 3.00x | 3.50x | 2.50x
|
| Q4 | 2007 | 2.50x | 3.50x | 4.00x | 3.25x | 3.50x | 2.75x
|
|
|
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