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Investing.com -- Moody’s Ratings has downgraded Six Flags Entertainment Corporation’s credit ratings following weaker-than-expected performance after its merger with Cedar Fair.
The rating agency lowered Six Flags’ Corporate Family Rating to B2 from Ba3 and downgraded several other ratings, while maintaining a stable outlook. The company’s liquidity rating was also reduced to SGL-3 from SGL-2, indicating adequate but weakened liquidity.
The two-notch downgrade reflects significant operational challenges following the July 2024 merger with Cedar Fair. Lower attendance and increased operating costs have led to a roughly 30% drop in the company’s 2025 EBITDA outlook, from an initial range of $1.08-$1.12 billion to the current $780-$805 million range.
Six Flags’ management is now reassessing its entire park portfolio, with some underperforming locations being considered for divestiture. The company’s parks show significant performance differences, with approximately 70% of total EBITDA coming from outperforming locations.
Moody’s projects that Six Flags’ adjusted debt/EBITDA ratio will reach 7.5x by the end of 2025, with negative free cash flow this year. The rating agency does not anticipate material improvement in credit metrics in 2026 without debt repayment from potential asset sales.
The company’s liquidity position includes $62 million in cash as of the end of Q3 2025 and $692 million available on its $850 million senior secured revolving credit facility. Six Flags faces significant cash needs over the next 18 months, including $1 billion in debt obligations due in April 2027 and an estimated $316 million payment due in January 2027 for the purchase of partnership interests in Six Flags Over Georgia and White Water Atlanta.
Moody’s stable outlook reflects expectations that Six Flags will maintain adequate liquidity, reduce costs, and apply potential asset sale proceeds to debt repayment.
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