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S&P May Cut Six Flags Further Into Junk - AP - 9/18/06

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  • S&P May Cut Six Flags Further Into Junk - AP - 9/18/06

    http://biz.yahoo.com/ap/060918/six_f...ings.html?.v=1

    NEW YORK (AP) -- Standard & Poor's said Monday it may lower theme and amusement park operator Six Flags Inc. further into junk territory, citing the company's weak profitability, negative discretionary cash flow and rising debt.

    S&P placed Six Flags' ratings, including its 'B-' corporate rating, placed on "CreditWatch" with negative implications, saying it will reevaluate the company's business strategies and operating outlook based on third-quarter results.

    "The company's turnaround effort appears to be more challenging than we had previously anticipated, requiring more time, investment, and uncertainty," said S&P credit analyst Hal F. Diamond, in a statement.

    New York-based Six Flags, the world's largest operator of theme parks, had roughly $2.6 billion of debt and preferred stock outstanding as of June 30, S&P said.

    The company is evaluating options for seven properties, and though proceeds from asset sales could help reduce debt, it is unclear how much Six Flags would gain, S&P said. Also, weaker performance and higher spending will further limit improvement.
    Shares of rose 8 cents to close at $5.47 on the New York Stock Exchange.

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