More bad news for SF

[Bob O]

S&P may lower Six Flags' debt deeper into junk
Mon Sep 18, 2006 2:40pm ET


NEW YORK, Sept 18 (Reuters) - Standard & Poor's said on Monday it may cut Six Flags Inc.'s (SIX.N: Quote, Profile, Research) debt ratings deeper into junk territory, citing the company's weak financial standing.

"The company's turnaround effort appears to be more challenging than Standard & Poor's had previously anticipated, requiring more time, investment and uncertainty," the rating agency said in a statement.

S&P currently rates Six Flags' corporate credit as highly speculative, at "B-minus," six notches below investment grade. A rating downgrade could increase its borrowing costs.

S&P said the theme park operator has weak profitability, and increased spending by park attendees has not offset a decline in overall park attendance.



Six Flags' debt is rising and its discretionary cash flow is negative, Standard & Poor's said.

"Financial performance is being hampered by additional operating expenses associated with new management's plan to make the parks more appealing to families," the statement said.



© Reuters 2006. All Rights Reserved.

[zjohn1988]

Bye Six Flags

[Jackluver18]

Im confused by this someone wanna break it down for me?

[Chitown]

It basically means that creditors don't trust SF to pay back their debts in a timely manner or at all.

I wouldn't worry about this. This is what happens when things don't turn around in a quick matter. Most of us know that it's going to take years for SF to make a decent and positive turnaround.

Wallstreet has always been about knee jerk reactions.

[Jackluver18]

Oh ok, thank you. Well hope nothing bad happens in the meantime

[SFaddiction84]

Did you honestly expect a year to make a difference? this isnt like a local grocery store were you can just alter some sales or offer new products and get higher attandance in weeks, this is a MAJOR theme park chain! give it a year or 2 geez

[Bob O]

This is bad news for the park. It will cost them more money to magane the 2 billion in debt they have.
Due to the debt ratings going down even futhur the interest rate they pay on the debt will go up in addition to interest rates already going higher, so it is a double whammy to the bottom line, and that money has to come from somewhere and that is likely to the capital improvement budget.

[Ilovthevu']

I would do the same thing even though I'm an enthusiast who loves Six Flags. My top three parks are Six Flags. When attendence has dropped that much, spending for some useless things has gone up, no more big coasters that bring in the people anymore, and Magic Mountain might be closing (Everyone knows this place including the stock people. Where is Elitch Gardens? People don't have a clue.), what do you expect to happen?

By the way, Six Flags Darien Lake has admission at $19.99. Six Flags sure knew how to not add any improvements to that park.
http://www.sixflags.com/parks/darienlak ... index.html

[Mr. D.T.]

Maybe if each park got 50,000 in attendance from each day forward that may reverse the cash flow. Just a wild guess.

How long has Six Flags been in debt? Three years? The more debt this company is plunged into the less hope for new rides for the parks. I hope they don't have to declare bankrupcy anytime soon like the broken-down United Airlines.

[Sireze]

I have a question:

How is it that build up rides for the parks but they are in debt? Now doesn't debt mean your FLAT broke and u cannot buy or do anything?

[w00dland]

They are called loans and credit...not very hard to come by when you own 30 parks.

[Sedir]

Is there anymore word on the selling of the parks (or the park pack)?

[Carlo]

There is currently no word about what’s going to happen. They will not comment on it till after the parks closed for the season. So if they are planning to sell the parks expect an announcement in November.

[Bob O]

I know that SF has been in debt for many years, but i couldnt say when it started. And debt. isnt a bad thing if used properly, but it is much harder when its over 2 billion in debt and you have to pay huge amounts of money just on the interest before you begin paying down the principal.

[SFaddiction84]

Maybe if they ANNOUNCE park closings before the end of the season, they can one last RUSH of people trying to pack into the park that 1 last time before they close for ever!, they need to sell some of there bottom profit parks

[shockwave guy mark]

well live threw this, it wont affect them, all they have to do is... well i dont know.