Article
Six Flags Debt Slides Amid Concerns Over Elevated Leverage, Fatal Roller Coaster Accident
Six Flags Entertainment Corp. bonds decreased sharply in secondary trading amid concerns over the theme park operator’s elevated leverage, potential litigation and financial performance and as activist investor Jana Partners pushes the company to explore a possible sale.
Six Flags is facing legal scrutiny regarding passenger safety on rides after a fatal roller coaster accident on Oct. 12 that prompted the company to temporarily close nine similar rides across North America, as reported by the Associated Press. The company is also facing lawsuits against its Six Flags Magic Mountain park alleging brain injuries from its X2 roller coaster in California.
Its 8.625% senior 2032 notes were quoted at 84.4 today, down from 96.92 in mid-September, and its 5.25% 2029 notes were quoted at an average price of 88.17 today, down from about 97 in mid-July, according to Solve.
Its 7.25% notes due 2031 declined to approximately 84 today from about 96 in March, according to IHS Markit:
For the second quarter ended June 28, the company reported that revenue decreased 7% year over year to $864.5 million, and same-park revenue increased 2.4% and same-park adjusted EBITDA increased 6.8% to $248.9 million.
During the second-quarter earnings call, management said it expects adjusted EBITDA to grow year over year in both the third and fourth quarters of 2026.
“We should be in a $400 million to $425 million range, but over time, we still feel good about getting the net leverage down to where it should be,” said John T. Reilly, Six Flags’ president and CEO.
The company said it ended the second quarter with an estimated $837 million in total liquidity, with net debt of $4.9 billion and net leverage of 6.1x on a same-park basis, compared with its long-term goal of approximately 4x.
An estimated capital structure for the company as of June 28 is as follows:
Six Flags Entertainment Corp. common shares last traded at $9.73. The company’s total market capitalization is approximately $930 million. Shares were down about 26% over the past month.
Six Flags did not respond to requests for comment.
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