Cedar Fair commences offering of $500 million senior unsecured notes

Posted Thursday, May 20, 2010 11:36 AM | Contributed by Jeff

Cedar Fair Entertainment Company (NYSE: FUN), a leader in regional amusement parks, water parks and active entertainment, today announced its intention to offer its initial issuance of senior unsecured notes. The offering will be $500 million aggregate principal amount of senior unsecured notes due 2020 (the “Notes”) in a private placement, subject to market and other conditions. The Notes will be guaranteed by Cedar Fair’s wholly-owned subsidiaries. As part of its overall refinancing plan, the Company is also launching the syndication of new senior secured credit facilities. The Company intends to use the net proceeds from the offering of the Notes, along with the new senior secured credit facilities, to repay in full all amounts outstanding under its existing credit facilities.

The Notes will be offered only to qualified institutional buyers under Rule 144A of the Securities Act of 1933, as amended (the “Securities Act”), and to certain non-U.S. persons in transactions outside the United States under Regulation S of the Securities Act. The initial issuance and sale of the Notes will not be registered under the Securities Act, and, the Notes may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and other applicable securities laws.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Notes, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

Read the entire press release from Cedar Fair.

Thursday, May 20, 2010 1:12 PM
Fun's avatar

Anyone care to translate for us?

Thursday, May 20, 2010 1:38 PM

They are pursuing two paths with respect to refinancing debt. First is the issuance of $500 million of notes through a private placement which means they will not be publicly traded notes which people can buy and selll easily. Terms of those notes (most importantly the interest rate) will be negotiated between CF and the buyers of the notes.

Second thing they are doing is trying to get together (syndicate) a new bank group/credit facility. Typically, borrowers approach the lenders in their existing bank group when they are looking to refinance. They understand the company and were at least at one time willing to lend to it. Sometimes one or more of those lenders will not want to be a part of the new deal for various reasons. If that is the case, the existing lenders can step up for the difference or you need to find other banks to join the new bank group. As part of those discussions, the lenders and CF will talk about the terms of the financing including the interest rates. The lenders will be more inclined to join the deal if the interest rates are higher (what most borrowers have seen over the past 18 months to 2 years has been increased interest rates to renew/extend) and other terms are more favorable to the lenders.

The amount of money they borrower under both facilities will be used to repay all existing debt of CF and to provide a line of credit for the company to fund its ongoing operations beyond what its cash flow can support.


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