Six Flags Entertainment Corporation -- Moody's assigns B3 rating to Six Flags' proposed unsecured notes due 2021; B1 CFR not affected

New York, December 05, 2012 -- Moody's Investors Service assigned a B3 rating to Six Flags Entertainment Corporation's (Six Flags) proposed $600 million senior unsecured notes due 2021, and upgraded the credit facility ratings of Six Flags Theme Parks Inc. (SFTP; Six Flag's wholly-owned subsidiary) to Ba2 from B1. Moody's is transferring the B1 Corporate Family Rating (CFR) and Probability of Default Rating (PDR) to Six Flags from SFTP since Six Flags is now the top level debt issuer within the organization. Six Flags' B1 PDR is one notch above the prior B2 PDR at SFTP to reflect a change in the mean family recovery rate from 65% to a 50% level that is typical for companies with multiple classes of debt. Moody's updated the loss given default assessments to reflect the revised debt structure. The rating outlook is stable.

Assignments:

..Issuer: Six Flags Entertainment Corporation

....Corporate Family Rating, Assigned B1

....Probability of Default Rating, Assigned B1

....Speculative Grade Liquidity Rating, Assigned SGL-2

....Senior Unsecured Regular Bond/Debenture, Assigned B3, LGD5 - 79%

Upgrades:

..Issuer: Six Flags Theme Parks Inc.

....Senior Secured Bank Credit Facility (Revolver and Term Loans), Upgraded to Ba2, LGD2 - 25% from B1, LGD2 - 29%

Withdrawals:

..Issuer: Six Flags Theme Parks Inc.

....Corporate Family Rating, Withdrawn, previously rated B1

....Probability of Default Rating, Withdrawn, previously rated B2

....Speculative Grade Liquidity Rating, Withdrawn, previously rated SGL-4

RATINGS RATIONALE

Six Flags plans to utilize the net proceeds from the proposed bond offering to fund up to $350 million of share repurchases and other general corporate purposes over the next 18 months, to repay its $72 million term loan A and partially pay down its $860 million term loan B. The increase in debt is negative and will raise debt-to-EBITDA leverage to approximately 5.1x (LTM 9/30/12 incorporating Moody's standard adjustments, the partnership puts as debt, and the proposed refinancing). The increase in debt and leverage was anticipated in the November 27 change to the company's rating outlook to stable from positive, which followed SFTP's announcement that it planned to amend its credit facility to provide greater flexibility to issue debt to fund additional restricted payments by Six Flags.

Cash interest expense will also increase by roughly $16-$17 million. The planned share repurchases will reduce the dividend outlay and could largely or fully offset the incremental cash interest depending on the number of shares repurchased. Moody's still considers the mix effect on cash uses to be negative as dividends can be reduced or cut to preserve cash while interest is not an outlay that can be voluntarily deferred or avoided.

Six Flags' B1 CFR reflects the sizable attendance and revenue generated from the geographically diversified regional amusement park portfolio, vulnerability to cyclical discretionary consumer spending, high leverage, liquidity and funding risks associated with minority holders' annual right to put their share of partnership parks to the company, and event risk relating to shareholder distributions and ownership transitions. The amusement park industry is mature and operators must compete with a wide variety of leisure and entertainment activities to generate consumer interest, with attendance growth in the low single digit range expected over the next 3-5 years. The new management team installed in conjunction with the company's emergence from bankruptcy in April 2010 has implemented significant operational improvements to drive meaningful earnings growth. Moody's believes ongoing operational initiatives including yield management and an emphasis on season pass sales will continue to grow revenue and earnings over the intermediate term, although there is downside risk if the economy were to weaken. Moody's projects Six Flags' will generate moderately positive free cash flow after the recently increased dividend, and that debt-to-EBITDA leverage will fall to a mid 4x range over the next two years.

The proposed notes will be guaranteed by substantially all wholly-owned material domestic subsidiaries (this excludes the partnership parks), and will be effectively subordinated to SFTP's secured credit facility. The proposed note indenture permits restricted payments if consolidated debt-to-cash flow (similar to EBITDA) is less than 5.0x and the payments fall within an EBITDA -- 1.5x interest basket. Dividends for the first three quarters of 2013, up to $350 million of share repurchases, and any payments related to the partnership parks (including put obligations) are nevertheless permitted without having to meet the 5.0x leverage and EBITDA -- 1.5x builder basket at the time of payment (although dividends for the second and third quarters of 2013 would count against the builder basket). Incremental debt is permitted under the indenture if consolidated debt-to-cash flow is less than 5.5x. A credit facility up to $1.435 billion, the guarantee of HWP's debt (Great Escape Lodge), and up to $45 million of Partnership Park revolvers are permitted without having to meet the 5.5x debt-to-cash flow incurrence ratio. Debt issued to fund Partnership Park puts would need to meet the 5.5x incurrence test if not funded within the credit facility carve-out.

Six Flags' SGL-2 rating is effectively an upgrade from the SGL-4 rating at SFTP. The change reflects that the bond offering proceeds will temporarily increase cash (to approximately $630 million as of 9/30/12 pro forma for the offering) and improve the company's liquidity position leading into the next partnership put exercise period, depending on the timing of share repurchases. Roughly $350 million of potential partnership puts are exercisable annually from March 31 through late April and Six Flags must fund any exercises by May 15th. Moody's also estimates Six Flags will have seasonal cash needs of approximately $175 million over the next 5-6 months. Moody's expects that the cash proceeds will be utilized to repurchase stock over the next 12 months and the speculative-grade liquidity rating is likely to return to SGL-4 once the proceeds are deployed.

The stable rating outlook reflects Moody's view that Six Flags will continue to grow revenue and earnings absent significant economic headwinds, generate modestly positive free cash flow, and reduce debt-to-EBITDA to a mid 4x range by 2014.

Downward rating pressure could result if acquisitions, cash distributions to shareholders, ownership transitions, or declines in attendance and earnings driven by competition or a prolonged economic downturn lead to debt-to-EBITDA above 5.75x or CFO less capital spending-to-debt of less than 4%. Ratings could also be pressured if liquidity weakens - including if concerns arise regarding the company's ability to meet partnership put obligations -- or the company's financial policies become more aggressive.

A good liquidity position including sufficient cash, projected free cash flow and committed financing to fully cover potential partnership park put exercises would be necessary for an upgrade. Stable to improving operating performance and margins, management of shareholder distributions within excess cash and free cash flow, and a conservative leverage profile could position the company for an upgrade. Increased financial capacity to manage event risks such as debt-to-EBITDA in a low 4x range or lower and strong CFO less capital spending-to-debt would be necessary for an upgrade.

Please see the ratings tab on Six Flags' issuer page on www.Moodys.com for the last credit rating action and rating history. Please see Six Flags' credit opinion on www.Moodys.com for additional information on the company's ratings.

Six Flags' ratings were assigned by evaluating factors that Moody's considers relevant to the credit profile of the issuer, such as the company's (i) business risk and competitive position compared with others within the industry; (ii) capital structure and financial risk; (iii) projected performance over the near to intermediate term; and (iv) management's track record and tolerance for risk. Moody's compared these attributes against other issuers both within and outside Six Flags' core industry and believes Six Flags' ratings are comparable to those of other issuers with similar credit risk. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Please see the Credit Policy page on www.moodys.com for a copy of these methodologies.

Six Flags, headquartered in Grand Prairie, TX, is a regional theme park company that operates 18 North American parks. The park portfolio includes 14 wholly-owned facilities (including parks near New York City, Chicago and Los Angeles) and three consolidated partnership parks - Six Flags over Texas (SFOT), Six Flags over Georgia (SFOG), and White Water Atlanta - as well as Six Flags Great Escape Lodge, which is a consolidated joint venture. Six Flags currently owns 53.0% of SFOT and approximately 30.5% of SFOG/White Water Atlanta. Revenue including full consolidation of the partnership parks and joint venture was approximately $1.06 billion for the LTM period ended 9/30/12.

REGULATORY DISCLOSURES

The Global Scale Credit Ratings on this press release that are issued by one of Moody's affiliates outside the EU are endorsed by Moody's Investors Service Ltd., One Canada Square, Canary Wharf, London E 14 5FA, UK, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody's office that has issued a particular Credit Rating is available on www.moodys.com.

For ratings issued on a program, series or category/class of debt, this announcement provides relevant regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides relevant regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides relevant regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

Information sources used to prepare the rating are the following : parties involved in the ratings, parties not involved in the ratings, public information, and confidential and proprietary Moody's Investors Service information.

Moody's considers the quality of information available on the rated entity, obligation or credit satisfactory for the purposes of issuing a rating.

Moody's adopts all necessary measures so that the information it uses in assigning a rating is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process.

Please see the ratings disclosure page on www.moodys.com for general disclosure on potential conflicts of interests.

Please see the ratings disclosure page on www.moodys.com for information on (A) MCO's major shareholders (above 5%) and for (B) further information regarding certain affiliations that may exist between directors of MCO and rated entities as well as (C) the names of entities that hold ratings from MIS that have also publicly reported to the SEC an ownership interest in MCO of more than 5%. A member of the board of directors of this rated entity may also be a member of the board of directors of a shareholder of Moody's Corporation; however, Moody's has not independently verified this matter.

Please see Moody's Rating Symbols and Definitions on the Rating Process page on www.moodys.com for further information on the meaning of each rating category and the definition of default and recovery.

Please see ratings tab on the issuer/entity page on www.moodys.com for the last rating action and the rating history.

The date on which some ratings were first released goes back to a time before Moody's ratings were fully digitized and accurate data may not be available. Consequently, Moody's provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

John E. Puchalla VP - Senior Credit Officer Corporate Finance Group Moody'sInvestors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653John Diaz MD - Corporate Finance Corporate Finance Group JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 Releasing Office: Moody's Investors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653(C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. ("MIS") AND ITS AFFILIATES ARE MOODY'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND CREDIT RATINGS AND RESEARCH PUBLICATIONS PUBLISHED BY MOODY'S ("MOODY'S PUBLICATIONS") MAY INCLUDE MOODY'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY'S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY'S OPINIONS INCLUDED IN MOODY'S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. CREDIT RATINGS AND MOODY'S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY'S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY'S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY'S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY'S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED,DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT.

All information contained herein is obtained by MOODY'S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided "AS IS" without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY'S is not an auditor and cannot in every instance independently verify or validate information received in the rating process. Under no circumstances shall MOODY'S have any liability to any person or entity for (a) any loss or damage in whole or in part caused by, resulting from, or relating to, any error negligent or otherwise or other circumstance or contingency within or outside the control of MOODY'S or any of its directors, officers, employees or agents in connection with the procurement, collection, compilation, analysis, interpretation, communication, publication or delivery of any such information, or (b) any direct, indirect, special, consequential, compensatory or incidental damages whatsoever (including without limitation, lost profits), even if MOODY'S is advised in advance of the possibility of such damages, resulting from the use of or inability to use, any such information. The ratings, financial reporting analysis, projections, and other observations, if any, constituting part of the information contained herein are, and must be construed solely as, statements of opinion and not statements of fact or recommendations to purchase, sell or hold any securities. Each user of the information contained herein must make its own study and evaluation of each security it may consider purchasing, holding or selling.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY'S IN ANY FORM OR MANNER WHATSOEVER.

MIS, a wholly-owned credit rating agency subsidiary of Moody's Corporation ("MCO"), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MIS have, prior to assignment of any rating, agreed to pay to MIS for appraisal and rating services rendered by it fees ranging from $1,500 to approximately $2,500,000. MCO and MIS also maintain policies and procedures to address the independence of MIS's ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading "Shareholder Relations -- Corporate Governance -- Director and Shareholder Affiliation Policy."

Any publication into Australia of this document is by MOODY'S affiliate, Moody's Investors Service Pty Limited ABN 61 003 399 657, which holds Australian Financial Services License no. 336969. This document is intended to be provided only to "wholesale clients" within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY'S that you are, or are accessing the document as a representative of, a "wholesale client" and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to "retail clients" within the meaning of section 761G of the Corporations Act 2001.

Notwithstanding the foregoing, credit ratings assigned on and after October 1, 2010 by Moody's Japan K.K. ("MJKK") are MJKK's current opinions of the relative future credit risk of entities, credit commitments, or debt or debt-like securities. In such a case, "MIS" in the foregoing statements shall be deemed to be replaced with "MJKK". MJKK is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly owned by Moody's Overseas Holdings Inc., a wholly-owned subsidiary of MCO.

This credit rating is an opinion as to the creditworthiness or a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors. It would be dangerous for retail investors to make any investment decision based on this credit rating. If in doubt you should contact your financial or other professional adviser.