Cedar Fair Seeks $1.1 Billion Loan Refinancing to Lower CostChristine Idzelis
Cedar Fair LP, the operator of amusement parks including Knott’s Berry Farm, is seeking to lower the borrowing cost on its $1.13 billion term loan due in 2017 after reporting a third straight year of record earnings.
The company plans to refinance the debt with a $630 million term portion due in 2020, a $255 million revolving credit line maturing in 2018 and senior unsecured debt, according to Standard & Poor’s. S&P said today that it gave the proposed bank loans a BB+ rating, one level below investment-grade.
“We’re constantly monitoring the credit market and we’ll look for opportunities to improve both our average cost of debt as well as extending tenor and improving covenants where we can,” Brian Witherow, Cedar’s chief financial officer, said yesterday on an earnings call with analysts.
The Sandusky, Ohio-based company had net revenue of $1.07 billion last year, up 3.9 percent from 2011, while adjusted earnings before interest, taxes, depreciation and amortization increased 4.4 percent to a record $391 million in 2012, according to yesterday’s earnings statement.
The third consecutive year of record revenues and adjusted Ebitda resulted from “solid increases in average in-park guest per capita spending across the majority of our parks, along with near-record attendance levels,” Chief Executive Officer Matt Ouimet said in the statement.
The amusement park operator has $1.5 billion of debt, including about $405 million of bonds maturing in 2018, according to data compiled by Bloomberg. Cedar Fair’s $260 million revolving credit line, due in 2015, was undrawn at the end of last year, the data show.
Under a revolver, money can be borrowed again once it’s repaid; in a term loan, it can’t.