News Six Flags Financials

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Not only are SF season passes cheap (and I'm talking about the passes, that are to my mind a better deal than the memberships - having both options seems just confusing, but I'm glad they offer passes too), but those season passes are good at all SF parks, including parking. With CF you have to pay a lot more to get that. A season pass from SFA is a ridiculously good deal for the consumer, at least if you have a couple SF parks within striking distance (or are willing to travel). If you add a meal plan when there's a deal, you can also got off cheap on food and drinks at all their parks. And the meal plans have few limitations for what food you can get.

This all still gets back to what I was saying. I think they are underpriced, not that I'm complaining! I don't see how they make any money with this pricing.
 
I’ve read that this is actually a really good sign. One article explains how this indicates that Six Flags likely has more liquidity than investors give the chain credit for, and that the company anticipates a significant recovery from this crisis. In fact, both SF and CF stock both took a serious boost after this news broke.
 
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Who is buying these bonds besides the feds. They'd have to be rated as junk at best with their current revenue situation.
 
Well, I think that's what they're saying basically. If six is confident that they won't get rated as junk, it would indicate that six is actually in a position of strength.
 
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rswashdc said:
Who is buying these bonds besides the feds. They'd have to be rated as junk at best with their current revenue situation.
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I’m not an investment expert by any means, but I think that’s exactly why investors are buying their stock now. Stock prices are in the toilet because of the lack of revenue, but SIX is apparently confident that once the parks reopen, they’ll be in better shape. Sounds like the classic “buy low” technique.
 
Joe said:
I’m not an investment expert by any means, but I think that’s exactly why investors are buying their stock now. Stock prices are in the toilet because of the lack of revenue, but SIX is apparently confident that once the parks reopen, they’ll be in better shape. Sounds like the classic “buy low” technique.
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So, my understanding of how is works is when a company issues bonds like this, it triggers a credit rating report. Just like what happens when you or I buy a house or car etc.

Based on that credit report; the bonds will get a rating which will determine the amount of interest that SIX will have to pay on them.

It is typically bad practice to issue bonds when you know that they will get a bad rating.

So essentially, most analysts are saying "look, we don't think six needs to do this to survive; and so, the fact that they are doing this seems to mean that they think they will recover strong and are looking to fund reopening plus park development".

Of course, this analysis all goes the opposite direction if the bond rating comes back as junk.
 
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The bond rates will be whatever the market pays which currently is over 10% for junk bonds. I’m not against SIX doing this to get through the pandemic, but this takes a pretty bad debt position and makes it worse for the medium to long term.

I‘d almost wonder if they are doing this to build up a war chest for going shopping once other companies are available at fire sale prices.
 
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Interesting... Six Flags going into considerably greater debt for the purpose of expanding their stable of properties certainly would not be unprecedented.

Though doing so outside the window of economic boom times would be new, I believe.

If that is a motivation, may it work better this time than last.
 
You all are assuming these bonds will be rated junk. I wouldn't be so quick to assume that. The rating will be out in a day or two.

Don't say I didn't tell you.
 
If they don't extend my 2020 Gold Season pass and full dining plan through 2021, I will rate them junk!
 
m.moodys.com

Moody's affirms B2 CFR and assigns Ba2 rating to Six Flags' proposed senior secured notes; outlook negative

Rating Action
m.moodys.com

Just barely in the junk threshold.
@rswashdc

"New York, April 15, 2020 -- Moody's Investors Service (Moody's) assigned Six Flags Entertainment Corporation (Six Flags) subsidiary's proposed senior secured note a Ba2 rating. Moody's also affirmed Six Flags' B2 corporate family rating (CFR), B2-PD probability of default rating, B3 senior unsecured notes, and Ba2 rating on the senior secured credit facility issued by its subsidiary. The outlook remains negative. The speculative grade liquidity (SGL) rating was upgraded to SLG-3 from SGL-4."


They'll get about 7% interest on these.
 
Jahrules said:
m.moodys.com

Moody's affirms B2 CFR and assigns Ba2 rating to Six Flags' proposed senior secured notes; outlook negative

Rating Action
m.moodys.com

Just barely in the junk threshold.
@rswashdc

"New York, April 15, 2020 -- Moody's Investors Service (Moody's) assigned Six Flags Entertainment Corporation (Six Flags) subsidiary's proposed senior secured note a Ba2 rating. Moody's also affirmed Six Flags' B2 corporate family rating (CFR), B2-PD probability of default rating, B3 senior unsecured notes, and Ba2 rating on the senior secured credit facility issued by its subsidiary. The outlook remains negative. The speculative grade liquidity (SGL) rating was upgraded to SLG-3 from SGL-4."


They'll get about 7% interest on these.
Click to expand...
Could be worse. At least they'll get some needed cash inflow.
 
Six Flags stated in the release that they anticipate to spend $30-35 million per month while closed. I assume this is mostly debt service and executive pay?
 
They had $22M in cash and equivalents at the end of March. They must have been really close to running out of cash in April before issuing bonds.
 
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From the annual report:

"During the year ended December 31, 2023, we determined that the carrying value of our leased theme park in Oklahoma City, Oklahoma, Frontier City ("Frontier City") and our leased water park in Oklahoma City, Oklahoma, Hurricane Harbor Oklahoma City ("HHOKC") were not recoverable following multiple years of negative cash flows, as well as projected future cash flows that indicated the respective assets were not recoverable. Based on the analysis performed, we determined that the carrying value of Frontier City and HHOKC exceeded their fair value, resulting in a pre-tax, non-cash loss on impairment of $16.0 million and $7.0 million, respectively. The loss on impairment at Frontier City was allocated proportionally, in the amount of $8.8 million and $7.1 million, to Right-of-use operating leases, net and Property and equipment, net, respectively. The loss on impairment at HHOKC was allocated proportionally, in the amount of $4.3 million and $2.7 million, to Right-of-use operating leases, net and Property and equipment, net, respectively.

During the year ended January 1, 2023, we determined that our leased theme park in Houston, Texas, Hurricane Harbor Splashtown ("Splashtown") was not recoverable following multiple years of negative cash flows, as well as projected future cash flows that indicated the respective assets were not recoverable. Based on the analysis, we determined that the carrying value of Frontier City[sic] exceeded its fair value, resulting in a pre-tax, non-cash loss on impairment of $16.9 million. The loss on impairment was allocated proportionally, in the amount of $15.1 million and $1.8 million, to Right-of-use operating leases, net and Property and equipment, net, respectively."

https://otp.tools.investis.com/clie...&FilingId=17326504&CIK=0000701374&Index=10000
 
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I'm sorry, could someone please explain that to me? Not sure I'm understanding what that's saying. Are they saying that those parks lost a lot of money? Are they closing them?
 
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