Item 7.01 Regulation FD Disclosure
On April 15, 2020, Six Flags Entertainment Corporation (the “Company”) issued a press release announcing that Six Flags Theme Parks Inc. (“SFTP”), an indirect wholly owned subsidiary of the Company, is seeking to issue up to an aggregate of $665.0 million in a private offering of senior secured notes (the “Notes”). The Notes will be guaranteed on a senior secured basis by the Company, Six Flags Operations Inc. (“SFO”), and each of the current and future wholly-owned domestic restricted subsidiaries of SFTP that guarantee or will guarantee SFTP’s existing Credit Facility (as defined herein). A copy of the press release relating to the notes offering is furnished as Exhibit 99.1 hereto.
The Company intends to use a portion of the net proceeds from the Notes offering to repay short-term borrowings under its revolving credit facility, which it incurred prior to this offering together with cash on hand to prepay at par approximately $315.0 million of the outstanding borrowings under its existing Tranche B term loan facility (the “Term Loan B”). The remaining net proceeds will be used for general corporate matters and working capital purposes and transaction expenses.
The Notes will be offered to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and to certain persons outside of the United States pursuant to Regulation S under the Securities Act. The Notes and the related guarantees have not been registered under the Securities Act or the securities laws of any state or other jurisdiction, and may not be offered or sold in the United States without registration or an applicable exemption from the Securities Act and applicable state securities or blue sky laws and foreign securities laws. The information contained in this Current Report on Form 8-K, including the exhibits hereto, is neither an offer to sell nor a solicitation of an offer to purchase any of the Notes or any other securities of the Company.
On April 15, 2020, the Company announced certain modifications to the offer price in its annual offer to purchase outstanding units of the partnerships that own Six Flags Over Texas, Six Flags Over Georgia and Six Flags White Water Atlanta. Over the past five years, the partners have tendered to the Company an average of less than $1 million worth of units per year. The remaining redeemable units of approximately 69.0% and 46.8% of the Georgia limited partner and Texas limited partner, respectively, represent a current redemption value for the limited partnership units of approximately $529.3 million. The announcement is included in the press release furnished as Exhibit 99.1 hereto and incorporated herein by reference.
Item 8.01 Other Events
On April 14, 2020, SFTP received sufficient consents from the continuing lenders under its second amended and restated credit facility entered into on April 17, 2019, as subsequently amended (the “Credit Facility”) after giving effect to the repayment of a portion of the Term Loan B to amend the Credit Facility (the “Amendment”) substantially concurrently with the closing of the offering of the Notes to, among other things, (i) permit the issuance of the Notes, including specifically, permitting the Notes to mature inside the Term Loan B, (ii) suspend the senior secured leverage ratio financial maintenance covenant in the Credit Facility through the end of 2020, (iii) re-establish the financial maintenance covenant thereafter (provided that for each quarter in 2021 that such covenant is tested, SFTP will be permitted to use its quarterly Borrower Consolidated Adjusted EBITDA (as defined in the credit agreement governing the Credit Facility) from the second, third and fourth quarters of 2019 in lieu of the actual Borrower Consolidated Adjusted EBITDA for the corresponding quarters of 2020) and (iv) add a minimum liquidity covenant that will apply from the date of the Amendment through December 31, 2021. The modifications to the financial covenant and other provisions in the Credit Facility pursuant to the Amendment shall be in effect from the date of the Amendment until the earlier of the delivery of the compliance certificate for the fourth quarter of 2021 and the date on which SFTP, in its sole discretion, elects to calculate its compliance with the financial maintenance covenant by using its actual Borrower Consolidated Adjusted EBITDA instead of the 2019 figures as outlined above.
Cautionary Information Regarding Forward-Looking Statements
This Current Report on Form 8-K contains statements that may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact could be deemed forward-looking. These statements may involve risks and uncertainties that could cause actual results to differ materially from those described in such statements. These risks and uncertainties include, among others, (i) the adequacy of cash flows from operations, available cash and available amounts under our credit facilities to meet our future liquidity needs, particularly during
