[Ed. note: The following is an excerpt of a press release. -J]
Cedar Fair Entertainment Company (NYSE: FUN), a leader in regional amusement parks, water parks and active entertainment, today announced that it has amended its senior secured term debt facility dated July 29, 2010, on terms reflective of the recently improving conditions in the credit market, as well as the Company’s strong performance and favorable outlook for 2011 and beyond.
“This amendment is the latest step in the ongoing management of our capital structure to provide financial flexibility along with sustained and growing value for our unitholders,” said Dick Kinzel, Cedar Fair’s President and Chief Executive Officer. “The rate reduction alone offers us an annualized cash interest savings of approximately $18 million at today’s interest rate levels.”
Kinzel noted that the refinancing also is a testament of the Company’s relationship with its lenders, who continue to be strong supporters of Cedar Fair.
Under the new lending arrangements, interest rates have been reduced, certain covenants modified and the maturity extended one year to December 2017. Interest rates on the senior secured term debt facility decreased to LIBOR plus 300 basis points with a LIBOR floor of 1%. This represents a 1.5% improvement over the previous rates of LIBOR plus 400 basis points with a LIBOR floor of 1.5%. The amendment also improved the Company’s flexibility surrounding distribution payments. In 2011 the general distribution basket has been increased to $60 million from $20 million. This basket will revert back to $20 million beginning in 2012, while the parameters surrounding the excess cash flow sweep have been widened for 2012 and beyond. The customary affirmative and financial covenants remain unchanged.
“We continue to follow our balanced approach which consists of capital investment in our world class parks, along with the prudent management of our cash flow for sustainable and growing distributions and debt reduction. It is our goal to distribute $1.00 per unit in distributions in 2011, provided we achieve our 2011 free cash flow expectations,” concluded Kinzel.
Read the entire press release from Cedar Fair.