Cedar Fair seeks to amend four notes ahead of Six Flags merger

By Marisa Wong

Los Angeles, Nov. 3 – Cedar Fair, LP began on Friday a solicitation of consents from holders of its 5 3/8% senior notes due 2027, 5¼% senior notes due 2029, 5½% senior secured notes due 2025 and 6½% senior notes due 2028, all co-issued with its wholly owned subsidiaries, for the adoption of some proposed amendments to the indentures governing the notes, according to a press release.

As previously disclosed on Thursday, Cedar Fair and Six Flags Entertainment Corp. entered into a definitive merger agreement to combine in a merger of equals transaction.

Closing of the merger is not conditioned on a successful completion of the consent solicitation. The merger will not constitute a change of control under the indentures governing the notes, the company noted.

However, the proposed amendments do seek to modify the indentures to enable the co-issuers to select Nov. 2, the date of the merger agreement, as the testing date for purposes of calculating, with respect to the merger and related transactions, any and all ratio tests under the indentures.

These ratio tests include the 5.50 to 1.00 total indebtedness to consolidated cash flow ratio test; in the case of the 2027, 2029 and 2028 notes, the 3.75 to 1.00 consolidated secured indebtedness leverage ratio test; and in the case of the 2025 notes, the 3.75 to 1.00 consolidated first-lien leverage ratio test, each of which was satisfied when tested on Nov. 2.

Specifically, as of Sept. 24, the relevant date of determination when using a Nov. 2 testing date, the total indebtedness to consolidated cash flow ratio was 4.32 to 1.00, and, after giving pro forma effect to the merger, the total indebtedness to consolidated cash flow ratio would have been 4.81 to 1.00. As of Sept. 24, the consolidated secured indebtedness leverage ratio and consolidated first-lien leverage ratio were each 1.87 to 1.00, and, after giving pro forma effect to the merger, the consolidated secured indebtedness leverage ratio and consolidated first lien leverage ratio would have been 1.82 to 1.00.

The record date for the consent solicitation is 5 p.m. ET on Nov. 2.

The consent solicitation will expire at 5 p.m. ET on Nov. 9.

Holders who deliver consents to the proposed amendments will be eligible to receive an aggregate cash payment of $2.50 per $1,000 principal amount of 2027 notes, $2.50 per $1,000 principal amount of 2029 notes, $1.25 per $1,000 principal amount of 2025 notes and $2.50 per $1,000 principal amount of 2028 notes.

If holders of a majority in aggregate principal amount outstanding of a series of notes deliver consents to the proposed amendments on or prior to the expiration date, and all other conditions to the consent solicitation have been satisfied or waived, the company expects that the co-issuers, the guarantors party to the indentures, the indenture trustee and the collateral agent, as applicable, will execute one or more supplemental indentures effecting the proposed amendments with respect to that series of notes.

The supplemental indentures will be effective immediately upon execution; this will be the consent effective time.

Consents may be revoked at any time prior to the revocation deadline, which is the earlier of the consent effective time and the expiration date. Once a supplemental indenture is effective, all previously delivered consents given in respect of the applicable series of notes may not be revoked.

The consent payment will only be payable if the required consents are received. If payable, any consent payment will be made upon or immediately prior to consummation of the merger, and the proposed amendments will not become operative unless the consent payment is made.

If the needed consents for a series of notes are not delivered, no holder of that series, including holders who delivered their consent, will be eligible to receive the consent payment. Holders of notes for which no consent is delivered will not receive the consent payment, even though the proposed amendments, once effective, will bind all holders of that series of notes and their transferees.

The co-issuers said they reserve the right to modify or terminate the consent solicitation with respect to any series of notes at any time.

Goldman Sachs & Co. LLC is the solicitation agent (800 828-3182 or 212 902-5962; GS-LM-NYC@gs.com), and Global Bondholder Services Corp. is the information, tabulation and paying agent (855 654-2015 for banks and brokers or 212 430-3774 for all others; fax 212 430-3775/3779; contact@gbsc-usa.com).

Cedar Fair is an amusement resort operator based in Sandusky, Ohio. Cedar Fair’s parks are located in Ohio, California, North Carolina, South Carolina, Virginia, Pennsylvania, Minnesota, Missouri, Michigan, Texas and Toronto. Six Flags is an amusement park company based in Arlington, Tex. It has properties throughout the United States and in Canada and Mexico.

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