UPDATE: Deutsche Bank Downgrades Cedar Fair to Hold

In a report published Friday, Deutsche Bank AG downgraded its rating on Cedar Fair, L.P. FUN to Hold. Deutsche Bank noted, “Cedar Fair reported solid results for Q2 2012 as comparable EBITDA increased to $134.9 million (+5.1% versus $128.5 million) for the quarter. The resilience of Cedar Fair's business model is evident as the company reported an increase in guest spending at the park through August 5, 2012 (revenue growth +3%, guest per capita spend +3%), against a backdrop of other leisure businesses experiencing a pullback in consumer spending. We are currently projecting Cedar Fair to generate Adjusted EBITDA of $392 million (+4.7% versus $375 million in 2011) in 2012, which will modestly de-lever the credit to 3.9x. In 2013, we project Cedar Fair to generate Adjusted EBITDA of $402 million (+3% versus $392 million in 2012E), which will de-lever the credit to 3.6x. While we like this credit, given the strong free cash flow generation, modest de-leveraging and the ability for management to continue to post solid results, we believe the bonds are fully priced. With this report, we are downgrading the 9.125% Senior Unsecured Notes 2018 (trading at $112.5, 4.6% YTW and 503 bps STW) to a HOLD Rating.” Cedar Fair, L.P. closed on Thursday at $32.13.