Cedar Fair Announces Successful Closing of $1.0 Billion Term Loan B and $300 Million Revolving Credit Facility
Cedar Fair, L.P. (NYSE: FUN) announced the successful closure of a $1.0 billion term loan B and a $300 million revolving credit facility. The company used the proceeds to redeem its outstanding notes due in May 2025 and to refinance its existing credit facility. The transaction was executed well due to strong market demand and financial performance. The new credit facilities will provide flexibility and favorable rates, with Goldman Sachs as the lead arranger.
Cedar Fair successfully closed a $1.0 billion term loan B and a $300 million revolving credit facility, enhancing capital structure flexibility.
The transaction was executed with strong market demand, reflecting the company's solid financial performance.
The interest rates for the term loan and revolving credit facility are favorable, enhancing Cedar Fair's financial position.
While the refinancing provides flexibility, taking on additional debt may increase the company's financial leverage and interest expenses.
Insights
The refinancing moves by Cedar Fair suggest a strategic approach to capital management. By securing a
In analyzing the company's interest rates on the new debt, Term SOFR plus a margin of 2.00% per annum is a relatively favorable rate in the current economic climate, which could reduce interest expense and improve net income margins in the long term. Investors should, however, keep an eye on the company's ability to meet the covenants set forth in these credit facilities, as they often contain operational and financial restrictions that could affect the company's strategic decisions.
From a market positioning perspective, Cedar Fair's capital restructuring is indicative of a broader trend where companies in the entertainment and leisure sector are seeking to strengthen their balance sheets post-pandemic. The reference to a 'strong 2023 financial performance' by Cedar Fair's CFO underscores a recovery trajectory that may instill investor confidence. Moreover, the extension of maturity dates provides Cedar Fair with a buffer to navigate market uncertainties and invest in growth opportunities without the immediate pressures of debt repayment.
Considering the company's operational scale — overseeing multiple amusement parks and resorts — the new liquidity from the revolving credit facility enhances their capability to maintain and upgrade facilities, thereby potentially increasing visitor numbers and revenue. It's an opportunistic move that may be viewed positively by investors seeking stability and growth in the leisure industry.
Cedar Fair is using the proceeds from the new term loan and cash on hand to fund the previously announced redemption of all of its outstanding
“We are very pleased with the solid execution of the transaction and strong market demand for our term loan,” said Cedar Fair CFO Brian Witherow. “The overall strength of our balance sheet and strong 2023 financial performance created an opportunity for us to extend maturities and gain capital structure flexibility at market-favorable rates. We appreciate the strong support and continued confidence of our relationship banks and the debt capital markets.”
The interest rate for the term loan will be Term SOFR plus a margin of
Goldman Sachs served as lead arranger and Weil, Gotshal & Manges LLP represented Cedar Fair as borrower’s counsel. Additional joint lead arrangers on the deal are Wells Fargo Securities, LLC, PNC Capital Markets LLC, Citizens Bank, N.A., Fifth Third Bank, National Association, JPMorgan Chase Bank, N.A. through its agent J.P. Morgan Securities LLC, KeyBanc Capital Markets Inc., Capital One, National Association, HSBC Securities (
About Cedar Fair
Cedar Fair Entertainment Company (NYSE: FUN), one of the largest regional amusement-resort operators in the world, is a publicly traded partnership headquartered in
Forward-Looking Statements
Some of the statements contained in this news release that are not historical in nature constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements as to the Company’s expectations, beliefs, goals, strategies regarding the future and the satisfaction of any conditions relating to the Redemption. These estimates, projections, and other forward-looking statements may involve risks and uncertainties that are difficult to predict, may be beyond our control and could cause actual results to differ materially from those described in such statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Important factors, including general economic conditions, the impacts of public health concerns, adverse weather conditions, competition for consumer leisure time and spending, unanticipated construction delays, changes in the Company’s capital investment plans and projects and other factors discussed from time to time by the Company in its reports filed with the Securities and Exchange Commission (the “SEC”) could affect attendance at the Company’s parks and the Company’s growth strategies, and cause actual results to differ materially from the Company’s expectations or otherwise to fluctuate or decrease. Additional information on risk factors that may affect the business and financial results of the Company can be found in the Company’s Annual Report on Form 10-K and in the filings of the Company made from time to time with the SEC. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether a result of new information, future events, information, circumstances or otherwise that arise after the publication of this document.
This news release and prior releases are available under the News tab at https://ir.cedarfair.com
View source version on businesswire.com: https://www.businesswire.com/news/home/20240501081575/en/
Investor Contact: Michael Russell, 419.627.2233
Media Contact: Gary Rhodes, 704.249.6119
Alternate Media Contact: Andrew Siegel / Lucas Pers, Joele Frank, 212.355.4449
Source: Cedar Fair, L.P.
FAQ
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