Posted Tuesday, September 29, 2020 11:50 AM | Contributed by Jeff
From the press release:
Cedar Fair Entertainment Company (NYSE:FUN), a leader in regional amusement parks, water parks and immersive entertainment, today announced the Company has entered into an amendment in respect of its Credit Facilities to amend the terms thereof to, among other things, further suspend and revise certain of the financial covenants thereunder by an additional year, and provide the ability to incur incremental debt. Under the terms of the Credit Facilities amendment, the covenant waiver period has been extended from the fourth quarter of 2020 to the fourth quarter of 2021, and the covenant modification period has been extended by one year through the end of 2022.
“As market visibility beyond 2020 remains unclear, the one-year extension of both the covenant waiver period and the covenant modification period, combined with the actions we have taken in response to the COVID-19 crisis, provide us additional financial flexibility should we potentially need to manage through a longer than anticipated period of disruption resulting from the pandemic,” said Richard Zimmerman, Cedar Fair President and CEO. “We greatly appreciate the unwavering support of our long-tenured banking group as we better position ourselves for a recovery to historical performance levels. Our priority remains reopening all of our parks for the 2021 season, driving growth in our core business and reducing our net leverage ratio.”
Read the entire press release from Cedar Fair.
Lenders had already agreed Cedar Fair didn't have to comply with financial covenants through the end of this year. Now they have agreed that Cedar Fair doesn't need to comply with those covenants until the end of 2021. And Cedar Fair is permitted to borrow more money (presumably to help with liquidity). Given the seasonality of the business, seems like both Cedar Fair and the lenders think its a reasonable possibility that 2021 will look much like 2020.
Given the seasonality of the business, seems like both Cedar Fair and the lenders think its a reasonable possibility that 2021 will look much like 2020.
That was my take too.
Considering we are roughly 6 months away from the start of the 2021 season, I'd say it is unlikely things are normalized in that short a span of time.
There seems to be a certain level of realism present in this business, and most entertainment businesses, that is not present in all markets. Theatrical tours all pushed their schedules again for the third time, with the earliest possible shows not until the second quarter of next year. Basically the 2020-21 season has become the 21-22 season. Our NYC office is closed until June, because for people who do intend to work out of it, there's no way they can easily plan for anything until the end of the school year.
Normalcy bias.Wednesday, September 30, 2020 2:44 PM
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