Cedar Fair looking to borrow up to $1.85 billion

SANDUSKY - Cedar Fair LP, which owns Cedar Point and 16 other amusement and water parks, seeks to borrow as much as $1.85 billion to refinance debt.

Its $1.6 billion in debt prompted the firm to agree to a $2.4 billion purchase by New York private equity firm Apollo Global Management LLC, which was to help it restructure its debt. That deal was scrapped last month, however, upon shareholder resistance.

The firm said yesterday it plans to sell $500 million of senior unsecured notes due in 2020 and will refinance a $1.05 billion term loan and a $300 million revolving credit line. Cedar Fair can borrow up to $350 million more in an incremental term loan, the Sandusky firm said in a U.S. Securities and Exchange Commission filing.

Proceeds will repay all outstanding debt under existing credit facilities. The firm said it owed $1.48 billion on its term loans and had $216 million outstanding under its revolving credit lines at the end of March.

Cedar Fair hired JPMorgan Chase & Co. to set up new financing. Moody's Investors Service said yesterday it rated the planned bonds B2, five levels below investment grade, and the proposed credit facilities Ba2, two steps from investment quality.

It was unclear whether the new financing means Cedar Fair will reinstate a dividend scrapped last year to help the firm meet its loan obligations. Q Investments mutual funds, Cedar Fair's major shareholder with 18 percent of its stock, has urged Cedar Fair to reinstate the dividend at 50 cents to $1 a share a year.

Plus, there is no indication Cedar Fair granted Q Investments' request to let its representatives to the Cedar Fair board of directors in on the refinancing talks.