S&P Downgrades SeaWorld's Rating By One Notch, Pushing It Deeper Into Junk Territory

Standard & Poor's on Tuesday downgraded SeaWorld Entertainment Inc.'s corporate credit rating to B-plus from BB-minus, after a weaker-than-expected performance in the third quarter. The new rating is seven notches into speculative-grade, or "junk" status. The outlook is negative, meaning S&P could downgrade the rating again in the near term. The action "reflects our expectation that adjusted debt to EBITDA will likely remain weak compared to our 5.5x downgrade threshold through 2017," the agency said in a statement. "In addition, the company still faces challenges regarding reputational risk, and the economic recession in Brazil and U.S. dollar strength may remain key drivers for reduced travel to the Orlando market and attendance at SeaWorld Orlando."