ARLINGTON, Texas - Six Flags (NYSE:SIX) Entertainment Corporation (NYSE: SIX), a leading regional theme park company, announced the pricing of $850 million in senior secured notes with a 6.625% yield, due 2032. The offering, which is expected to close on May 2, 2024, is part of the company's financial strategy ahead of its planned merger with Cedar Fair (NYSE:FUN), L.P.
The proceeds from the notes will be allocated to paying down existing debt, including the company's term loan and revolving credit facility, as well as part of the outstanding 7.000% Senior Secured Notes due July 1, 2025. Remaining funds will serve general corporate purposes, which may include working capital, operating expenses, and capital expenditures.
The notes are being offered to qualified institutional buyers and certain persons outside the United States. They are not registered under the Securities Act or any state securities laws and will be available only through a private offering memorandum.
This financial move comes after the November 2, 2023, announcement of a merger agreement between Six Flags and Cedar Fair, with both companies set to merge into CopperSteel HoldCo, Inc., the surviving entity. If the merger is completed, the obligations of Six Flags as a co-issuer will be assumed by HoldCo, and Cedar Fair subsidiaries will co-issue the notes.
The notes and related guarantees will be secured by a first priority interest in substantially all assets of Six Flags, its subsidiary guarantors, and, following the merger, the co-issuers and guarantors.
Six Flags operates 27 parks across the United States, Mexico, and Canada, and is known for its roller coasters, themed rides, and water parks. The company's forward-looking statements indicate various factors that could impact its future performance, including the outcome of the proposed mergers and economic conditions.
This financial update is based on a press release statement and is for informational purposes only. It does not constitute an offer to buy any security or an endorsement of Six Flags' market position or future prospects.
InvestingPro Insights
As Six Flags Entertainment Corporation (NYSE: SIX) navigates through its strategic financial maneuvers, insight into the company's market performance and expectations is crucial for investors.
According to InvestingPro data, Six Flags currently holds a market capitalization of $1.99 billion. Despite a challenging market, the company has shown a revenue growth of 4.98% over the last twelve months as of Q4 2023, indicating a steady increase in its financial inflow.
InvestingPro Tips suggest that Six Flags is expected to see net income growth this year, which is a positive signal for potential investors looking for profitability. Analysts remain optimistic, predicting that the company will be profitable within the year.
This aligns with the company's plans for expansion and debt restructuring, as reflected in their recent senior secured notes offering. However, it's important to note that the stock is currently trading at a high earnings multiple with a P/E ratio of 50.09, which may influence investor perception of its valuation.
Moreover, Six Flags does not pay a dividend, which might be a consideration for income-focused investors. For those interested in exploring deeper metrics and gaining additional insights, InvestingPro offers more tips on Six Flags, which can be accessed at: https://www.investing.com/pro/SIX. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and discover the 6 additional InvestingPro Tips that could further inform your investment decisions.
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