Lehman Brothers is in the market with a $130 million increase to Six Flags' existing $600 million term loan. Pricing is set at LIBOR plus 21Ž2%. The terms are identical to those of the original term loan. "It's a classic, pure add-on," said Jim Dannhauser, Six Flags' cfo.
The proceeds of the increased term loan will be used to redeem the $122.5 million principal amount of the Company's 93Ž4% senior notes due 2007. "[Six Flags'] bonds were partially refinanced with the proceeds of a high-yield deal completed a couple of weeks ago," a banker said. "The bank facility will refinance the remainder," he added. At the start of the month the company raised $325 million of new 95Ž8% notes, redeeming $301.5 million of 93Ž4% senior notes due 2007 at 1047Ž8.
The new bank debt is likely to be sold to existing holders of the term loan, the banker noted. "We are optimistic that that is where the facility will largely get placed," Dannhauser confirmed. Lehman leads the original facility. In addition to the term loan, Six Flags' facility has a $400 million revolver.