S&P Cuts Six Flags Debt Rating To Default Status

CHICAGO (AP) — Standard & Poor's Ratings Services said Thursday it has lowered its corporate credit rating on Six Flags Inc. to default status, after the embattled amusement park operator said it will delay making a $7 million payment on some outstanding debt.

The rating was previously at "CCC," which is considered non-investment or "junk" grade.

The company, which is trying to stave off bankruptcy by restructuring, said Wednesday it will take advantage of a 30-day grace period for making the semiannual interest payment on its 9 3/4 percent senior notes due 2013, which was due that Wednesday.

Although S&P said the move does not constitute a default due to the payment grace period, the ratings service is considering it a default because the company is under "financial stress." S&P said it is not confident that Six Flags will be able to meet the debt obligation even with the grace period.

Six Flags said last month it may be forced to file for Chapter 11 bankruptcy protection if it could not complete an out-of-court restructuring.

Shares closed down a penny at 19 cents.