Vail Resorts expands credit, repurchases notes

Vail Resorts Inc . (NYSE:MTN), with a market capitalization of $6.36 billion, announced on Monday the expansion of its credit facilities and the repurchase of a portion of its convertible notes, indicating a strategic move to strengthen its financial position.

According to InvestingPro analysis, the company is currently trading near its 52-week low, with data suggesting slight undervaluation based on Fair Value metrics.

The Broomfield, Colorado-based company, known for its ski resorts and leisure properties, entered into an amendment to its credit agreement on January 27, 2025. This amendment increased its revolving credit loan commitments by $100 million, bringing the total to $600 million.

Additionally, the company secured an incremental term loan facility of $450 million in the form of delayed draw term loans, which can be accessed at the company’s discretion. InvestingPro data reveals that the company’s current ratio stands at 0.63, with short-term obligations exceeding liquid assets, making this credit facility expansion particularly significant.

The new credit facilities are intended to provide Vail Resorts with the financial flexibility to refinance its 0.0% Convertible Senior Notes due January 2026. As of the amendment’s closing date, the company has not drawn on these increased commitments.

In a related move, Vail Resorts also repurchased approximately $50 million of its convertible notes for an aggregate cash repurchase price of around $48 million, a 4% discount to par value. This transaction is scheduled to close on January 30, 2025, contingent on customary closing conditions. Following this repurchase, about $525 million of the notes will remain outstanding.

The company’s actions, which aim to manage its debt and optimize its capital structure, were detailed in a recent 8-K filing with the Securities and Exchange Commission (SEC). The filing also included cautionary statements regarding forward-looking information, reminding investors of the inherent risks and uncertainties in such statements.

Vail Resorts’ financial strategy reflects its proactive approach to managing its capital and debt, positioning itself for future growth and stability in the dynamic leisure and recreation industry.

With total debt of $3.03 billion, this strategic refinancing becomes crucial for the company’s financial health. For deeper insights into Vail Resorts’ financial position and access to comprehensive analysis, including 8 additional ProTips and detailed metrics, visit InvestingPro.

In other recent news, Vail Resorts reported a mixed early ski season performance with a slight drop in skier visits but an increase in certain revenue areas. The resort operator reported a 0.3% dip in skier visits but a 4.5% rise in lift ticket revenue. Ski school revenue saw a modest increase of 1.1%, while dining revenue jumped by 6.6%. However, retail and rental revenue at North American resort locations fell by 5.4%. Despite these mixed results, the company anticipates better performance for the remainder of the season.

In other developments, Vail Resorts is dealing with an ongoing ski patrol strike at its Park City (NYSE:TRAK) Mountain location. The company recently reached an agreement with the Park City Mountain patrol union, expressing regret for the disruptions caused by the strike.

Analysts from Truist Securities and Jefferies have also weighed in on the company’s prospects. Truist Securities lowered its price target for Vail Resorts to $247 but maintained a Buy rating, while Jefferies upgraded its stock target to $190, maintaining a Hold rating due to the value of the company’s growing customer base.

In a separate development, Everest Consolidator Acquisition Corp is currently facing legal disputes over unpaid accounting fees. The company is unable to process redemption requests due to ongoing litigation, the outcome of which remains uncertain.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.