More bad news for Six Flags

[Bob O]

AP
Moody's cuts Six Flags' ratings on default concern
Wednesday September 24, 4:41 pm ET
Moody's cuts Six Flags' ratings, citing potential for default on upcoming obligations


NEW YORK (AP) -- Moody's Investors Service said Wednesday it has downgraded Six Flags Inc.'s junk-grade corporate family and probability of default ratings, citing the possibility that the theme park operator will fail to meet its obligations.
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Moody's cut the ratings to "Caa2" from "Caa1." The ratings outlook is negative.

The ratings agency said it does not expect Six Flags to create enough free cash flow or have sufficient unused revolver capacity to fund two upcoming obligations. Moody's said the shortfall may force the New York-based company to rely on asset sales or refinancing in a difficult credit market.

The mandatory redemption date for Six Flags' $287.5 million Preferred Income Redeemable Securities, or PIERS, is Aug. 15, 2009. Its remaining $131 million senior unsecured notes mature on Feb. 1, 2010.

The ratings agency said a failure to fund the PIERS redemption is likely to constitute a default under Six Flags' credit agreement, which would trigger a cross default on bonds issued by the company.

Moody's noted that the company's operating performance improved during the summer.

Six Flags' shares fell 5 cents, or 5.4 percent, to 87 cents on Wednesday. The stock has traded between 25 cents and $3.68 during the past 52 weeks.

[tp41190]

This just makes me laugh. Six Flags should honestly just shut down for good...

[T.K.]

I think this is GREAT news!

[coasterkidd100]

^Why do you think this is GREAT news?

[T.K.]

once six flags goes down... and will be forced to sale their parks.. then maybe other companies would buy parks. Shapiro didn't change the park as much, In 2005 SFGADv got best themed area, Great Escape got really good Resort, SFGAm got SFHH very god themed... and many more... and now when Shapiro came... cut cut cut everywhere... Six Flags went down...

[BP317]

Cut cut cut everywhere because they probably still havent fully paid for those 2005 additions and they dont have the credit to tread water for many more years. SF has had major financial problems way before this news article and its not going to change unless $2 billion falls out of the sky.

[Coastermonkey61]

Six Flags Closeout Sale!!! EVERYTHING MUST GO!!!! You want Magic Mountain? WE GOT IT!!! How about Darien Lake? Sure, I guess. Don't forget about the ever popular Six Flags Mexico!!! WE'RE GOING CRRRRRRAZY!!!!!

[T.K.]

BUY 1!!! theme park and GET HALF!!! of our debt for FREE!!!

[saylorman47]

I think there's more bad news for Six Flags Fiesta Texas, who got a little in depth with their Fright Fest themeing...

[T.K.]

they should have just left it there... it makes a great fright fest theming LOL :D:D:D So real... I wouldn't be suprised if SFFT won #1 Fright themed theme park lol

[onyxhotel08]

I don't get why Magic Mountain, which has a total of 15 coasters, and is the most privileged in the chain, has such a problem in terms of money making and is constantly in danger of being sold. WHY bother giving it a new ride/attraction every two years then?

[tp41190]

^Because it needs that for attendance. If nothing is new, people will take there money elsewhere. There are so many other parks and alternatives that people can choose from, especially if they live further then 30 mins away. For SFGAM, if you live within 2-3 its basically you only theme park. Which is why SFGAm doesn't need as many coasters.

Also, SFMM is known for having a huge collection of coasters. We weren't, so if we don't have a coaster in a while it doesn't really change our reputation. Now, for our reputation of being themed, and classic IS dying which is sad.

[bobbinbop20]

well they cant run from their debt forever

[onyxhotel08]

Well, since the attendance is not exactly increasing dramatically when these rides are brought in MM, how about not getting them so often and instead spending less so your 2 billion dollar debt can start going down...just a thought. I remember reading about how Tatsu did not deliver the crowds the park was hoping for with that coaster. X2 I highly doubt made a big difference this year...or Thomas Town. Six Flags Magic Mountain will not suddenly hurt because they don;t get a new ride for a season, two or three. They will hurt if prices continue increasing and the park does not take care of itself...which it has started doing. QUALITY not QUANTITY

[zjohn1988]

Cut cut cut everywhere because they probably still havent fully paid for those 2005 additions and they dont have the credit to tread water for many more years. SF has had major financial problems way before this news article and its not going to change unless $2 billion falls out of the sky.

Too bad the government isnt a fan of SF...maybe this "new money supply bill" (which will fail even more) could help the parks...but it won't happen..

[BP317]

Six Flags Closeout Sale!!! EVERYTHING MUST GO!!!! You want Magic Mountain? WE GOT IT!!!

Already tried that.

How about Darien Lake?

Already did that .

[rb1]

So sad this have to happen to SF. Shaps idea of making parks family friendly, clean and better service are good but if they can change anything next season it should be making foods cheaper, parking and tickets more affordable or maybe better shows that doesnt involve watching a video and more concerts every week instead of just Sundays until the season ends and better theming. SF dont really need to add big rides to attract guest because our parks got enough rides to satisfy all types of people heck GA got more rides than any Disney park. BB should be themed in a farm not pirates cause it just ruins the theming in that area. Then once they raised enough money or get out of debt then maybe well get a big coaster for GA in the future.

[BP317]

A lot of people on this board seem obsessed with "once they get out of debt." Six Flags parks dont make $2 billion. Their busiest quarter this year they didnt have to pay off any of their debt and made $9mil. They have to start making payments on debt next fall, that will be when we see where SF stands financially.

[coasterkidd100]

^^Tickets are already pretty affordable, you just have to get a coupon or bring a coke can.

[onyxhotel08]

They made 9 million this quarter? Ehh...I'll wait for a dive machine for a few more years...unless they decide it is worth it or mark forks over some of his own money! Seriously, they have to start repaying their debt next fall? where do you start with 2 billion? How did it ever even come to that? My God I never saw those kinds of numbers before this. Scary.

[coasterkidd100]

^I don't think that it would be to hard for a theme park to fall that far into debt. You just put in expensive roller coasters and rides and don't get the money back. Then after you are already in debt you just keep adding rides and coasters and fall farther into debt.

[onyxhotel08]

You'd think they would stop after 1 billion...guess not

[coasterkidd100]

^Ya I would think so too. But they have to add somthing to bring people to the park to hopfully make some money and get out of debt.

[onyxhotel08]

Common sense to not spend money you don't have...glad to see they stopped before they reached 3 billion and gave MM 20 coasters and more 'record breakers' for more parks.

[BP317]

or mark forks over some of his own money!

He doesnt make enough to buy a coaster. It wouldnt surprise me if he made more money with ESPN than he does with Six Flags.

Bill Gates and Dan Snyder are major investors in Six Flags and have a LOT more money than Mark Shapiro though