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Six Flags Amends Credit Facility Providing Additional Financial Flexibility

August 27, 2020, 07:00 AM
Filed Under: Entertainment

Six Flags Entertainment Corporation announced that it has amended its credit facility to further extend the covenant waiver period by one year, from the fourth quarter of 2020 to the fourth quarter of 2021, and to extend the covenant modification period by one year through the fourth quarter of 2022. In addition, all of the company’s incremental revolving credit lenders agreed to extend the incremental $131 million revolving commitments by one year.

“The operational actions we have taken to respond to the COVID-19 crisis, coupled with the one-year extension of both our covenant waiver period and the incremental revolving credit facility commitments, provide us with significant flexibility and financial strength as we manage through the pandemic-related disruption,” said Mike Spanos, President and CEO. “We remain focused on safely reopening more of our parks, profitably growing our base business, and reducing our net leverage ratio.”

Credit Facility Amendment

The amendment will, among other benefits, extend the suspension of the testing of the senior secured leverage ratio financial maintenance covenant through the end of 2021, unless the company elects to resume the net leverage covenant earlier. Commencing with the first quarter of 2022, through the third quarter of 2022, the company may elect to calculate the net leverage covenant by substituting Borrower Consolidated Adjusted EBITDA, as defined in the credit agreement, from the second, third and fourth quarters of 2022 with Borrower Consolidated Adjusted EBITDA from the second, third and fourth quarters of 2019. As a result, this amendment will eliminate the use of Borrower Consolidated Adjusted EBITDA from 2020, or the second, third, and fourth quarters of 2021, in any net leverage covenant test. In addition, the company has agreed to extend the duration of the minimum liquidity covenant through December 31, 2022.

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