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Long-Term Indebtedness
12 Months Ended
Dec. 31, 2019
Long-Term Indebtedness  
Long-Term Indebtedness

8.

Long-Term Indebtedness

Credit Facility

As part of our ongoing operations, we periodically refinance our existing credit facility. As of December 31, 2019, our credit facility consisted of a $350.0 million revolving credit loan facility (the “Second Amended and Restated Revolving Loan”) and an $800.0 million Tranche B Term Loan facility (the “Second Amended and Restated Term Loan B”) pursuant to the amended and restated credit facility that we entered into in 2019 (the “Second Amended and Restated Credit Facility”). Our prior credit facility (as previously amended as described below, the “2015 Credit Facility”) consisted of a $250.0 million revolving credit loan facility (the “2015 Revolving Loan”) and a $700.0 million Tranche B Term Loan (the “2015 Term Loan B”) and was amended and restated in conjunction with the Second Amended and Restated Credit Facility.

On March 26, 2018, we entered into an amendment to the 2015 Credit Facility that reduced the overall borrowing rate on the 2015 Term Loan B by 25 basis points by reducing the applicable margin from LIBOR plus 2.00% to LIBOR plus 1.75%. We capitalized $0.5 million of debt issuance costs directly associated with the issuance of this amendment.

On April 18, 2018, we entered into an amendment to the 2015 Credit Facility that increased our 2015 Term Loan B borrowings by $39.0 million. We capitalized $0.3 million of debt issuance costs directly associated with the issuance of this amendment. The proceeds of the additional borrowings were used for general corporate purposes, including share repurchases.

On April 17, 2019, we amended and restated the 2015 Credit Facility (as previously amended). The Second Amended and Restated Credit Facility is comprised of the $350.0 million Second Amended and Restated Revolving Loan and the $800.0 million Second Amended and Restated Term Loan B. In connection with entering into the Second Amended and Restated Credit Facility, we repaid the amounts outstanding on the 2015 Revolving Loan and the outstanding 2015 Term Loan B and we recognized a loss on debt extinguishment of $6.2 million. The remaining proceeds from the Second Amended and Restated Credit Facility will be used for general corporate purposes, including payment of refinancing fees. We capitalized $8.9 million of debt issuance costs directly associated with the issuance of the Second Amended and Restated Credit Facility.

On October 18, 2019, we entered into an amendment to the Second Amended and Restated Credit Facility which reduced the overall borrowing rate on the Second Amended and Restated Term Loan B by 25 basis points by reducing the applicable margin from LIBOR plus 2.00% to LIBOR plus 1.75%. Excluding the cost to execute the transaction, the lower borrowing rate reduces interest expense by approximately $2.0 million annually. We recognized a loss on debt extinguishment of $0.3 million related to the transaction.

As of December 31, 2019, no amounts were outstanding under the Second Amended and Restated Revolving Loan (excluding amounts reserved for letters of credit in the amount of $20.8 million). As of December 31, 2018, $43.0 million was outstanding under the 2015 Revolving Loan (excluding amounts reserved for letters of credit in the amount of $18.1 million). Interest on the Second Amended and Restated Revolving Loan accrues at an annual rate of LIBOR plus an applicable margin with an unused commitment fee based on our senior secured leverage ratio. As of December 31, 2019, the Second Amended and Restated Revolving Loan unused commitment fee was 0.3%. The principal amount of the Second Amended and Restated Revolving Loan is due and payable on April 17, 2024.

As of December 31, 2019 and 2018, $796.0 million and $583.8 million, respectively, was outstanding under the Second Amended and Restated Term Loan B and the 2015 Term Loan B, respectively. Interest on the Second Amended and Restated Term Loan B accrues at an annual rate of LIBOR plus an applicable margin, based on our consolidated leverage ratio.  In June 2019, we entered into the June 2019 Swap Agreements to mitigate the risk of an increase in the LIBOR interest rate in effect on the Second Amended and Restated Term Loan B. In August 2019, we entered into the August 2019 Swap Agreements to further mitigate the risk of an increase in the LIBOR interest rate in effect on the Second Amended and Restated Term Loan B. As of December 31, 2019 and 2018, the applicable interest rate on the Second Amended and Restated Term Loan B and the 2015 Term Loan B, respectively, was 3.48% and 4.26%, respectively. Beginning on September 30, 2019, the Amended and Restated Term Loan B became payable in equal quarterly installments of $2.0 million. All remaining outstanding principal of the Second Amended and Restated Term Loan B is due and payable on April 17, 2026.

Amounts outstanding under the Second Amended and Restated Credit Facility are guaranteed by Holdings, Six Flags Operations Inc. ("SFO") and certain of the domestic subsidiaries of SFTP (collectively, the "Loan Parties"). The Second Amended and Restated Credit Facility is secured by a first priority security interest in substantially all of the assets of the Loan Parties. The Second Amended and Restated Credit Facility agreement contains certain representations, warranties, affirmative covenants and financial covenants (specifically, a maximum senior secured net leverage maintenance covenant). In addition, the Second Amended and Restated Credit Facility agreement contains restrictive covenants that, subject to certain exceptions, limit or restrict, among other things, the incurrence of indebtedness and liens, fundamental changes, restricted payments, capital expenditures, investments, prepayments of certain indebtedness, transactions with affiliates, changes in fiscal periods, modifications of certain documents, activities of the Company and SFO and hedging agreements, subject, in each case, to certain carve-outs.

2021 Notes, 2024 Notes and 2027 Notes

On December 21, 2012, Holdings issued $800.0 million of 5.25% senior unsecured notes due January 15, 2021 (the “2021 Notes”). The proceeds from the 2021 Notes were used to repay the $72.2 million that was outstanding under our 5-year $75.0 million Tranche A Term Loan facility and $277.8 million of the outstanding balance of the Term Loan B. The remaining proceeds were used for share repurchases. Interest payments of $21.0 million were due semi-annually on January 15 and July 15 (except in 2013 when we only made one interest payment of $22.3 million on July 15).

On June 16, 2016, Holdings issued $300.0 million of 4.875% senior unsecured notes due July 31, 2024 (the "2024 Notes"). We capitalized $4.7 million of debt issuance costs directly associated with the issuance of the 2024 Notes. We used approximately $150.0 million of the proceeds from the issuance of the 2024 Notes to reduce our borrowings under the 2015 Term Loan B. We used the remaining net proceeds of the sale of the 2024 Notes for general corporate and working capital purposes, which primarily included repurchases of our common stock.

On April 13, 2017, we issued an additional $700.0 million of 4.875% Senior Notes due July 31, 2024 (the "2024 Notes Add-on"). We capitalized $3.9 million of debt issuance costs directly associated with the issuance of the 2024 Notes Add-on. Interest payments of $24.4 million for the 2024 Notes and the 2024 Notes Add-on are due semi-annually on January 31 and July 31 of each year, with the exception of the first payment for the 2024 Notes on January 31, 2017, which was $9.1 million.

On April 13, 2017, we issued $500.0 million of 5.50% Senior Notes due April 15, 2027 (the "2027 Notes"). We capitalized $2.6 million of debt issuance costs directly associated with the issuance of the 2027 Notes. Interest payments of $13.8 million are due semi-annually on April 15 and October 15 of each year, with the exception of the first payment on October 15, 2017, which was $13.9 million.

A portion of the net proceeds from the issuance of the 2024 Notes Add-on and 2027 Notes was used to redeem all of the outstanding 2021 Notes and to satisfy and discharge the indenture governing the 2021 Notes, including to pay the accrued and unpaid interest to the redemption date, the related redemption premium on the 2021 Notes, and related fees and expenses. The remaining net proceeds were used for general corporate and working capital purposes, which primarily included repurchases of our common stock. In connection with the redemption of all of the outstanding 2021 Notes, in the second quarter of 2017 we recognized a loss on debt extinguishment of $36.9 million.

The 2024 Notes, the 2024 Notes Add-on and the 2027 Notes are guaranteed by the Loan Parties. The 2024 Notes, the 2024 Notes Add-on and the 2027 Notes contain restrictive covenants that, subject to certain exceptions, limit or restrict, among other things, the ability of the Loan Parties to incur additional indebtedness, create liens, engage in mergers, consolidations and other fundamental changes, make investments, engage in transactions with affiliates, pay dividends and repurchase capital stock. The 2024 Notes, the 2024 Notes Add-on and the 2027 Notes contain certain events of default, including payment defaults, breaches of covenants and representations, cross defaults to other material indebtedness, judgment, and changes of control and bankruptcy events of default.

Total Indebtedness Summary

As of December 31, 2019 and 2018, total debt consisted of the following:

 

As of

(Amounts in thousands)

    

December 31, 2019

    

December 31, 2018

Credit Facility

Second Amended and Restated Term Loan B

    

$

796,000

    

$

2015 Term Loan B

583,750

2015 Revolving Loan

 

 

43,000

2024 Notes

 

1,000,000

 

1,000,000

2027 Notes

 

500,000

 

500,000

Net discount

 

(6,535)

 

(6,792)

Deferred financing costs

 

(14,581)

 

(13,446)

Total debt

$

2,274,884

$

2,106,512

Less current portion of long-term debt

 

(8,000)

 

Less short-term borrowings

(43,000)

Total long-term debt

$

2,266,884

$

2,063,512

As of December 31, 2019, annual maturities of long-term debt, assuming no acceleration of maturities, were as follows:

(Amounts in thousands)

    

    

For the year ending December 31:

  

2020

8,000

2021

8,000

2022

8,000

2023

8,000

2024

1,008,000

2025 and thereafter

1,256,000

$

2,296,000

Fair-Value of Long-Term Indebtedness

As of December 31, 2019 and December 31, 2018, the fair value of our long-term debt was $2,348.9 million and $2,012.4 million, respectively. The measurement of the fair value of long-term debt is based on market prices that are generally observable for similar liabilities at commonly quoted intervals and is considered a Level 2 fair value measurement.