Fitch rating on Monday has downgraded Six Flags Operations Inc, citing Issuer Default Rating (IDR), senior unsecured notes affirmed at 'C/RR6' to “C” from “CC”, and Six Flags Theme Park Inc, secured bank credit facility downgraded to 'CCC/RR2' from 'B-/RR2'.
Six Flags does not generate sufficient internal cash flow to repay its mandatory convertible preferred stock (PIERs), and given the state of the credit markets and current pricing on Six Flags securities, Fitch felt the downgrade was necessary.
In 2008, Six Flags stated a total debt of $2.7 billion, made up of $1.3 billion in senior unsecured notes, $1.1 billion in bank debt and about $300 million in PIERs.
Fitch expects that Six Flag's liquidity should be sufficient to cover operating costs in the off-season and invest in its parks.
In addition, Six Flags has about $130 million in notes due in February 2010, and Fitch has not included the $435 million in liability that is attributed to the Partnership Parks' limited partner’s equity.
On November 2008, Fitch rates Six Flags' 'CCC' IDR due to the upcoming maturity of Six Flags' $287.5 million, due in August 2009and accrued dividends mandatorily convertible preferred stock (PIER).