UPDATE: Deutsche Bank Downgrades Cedar Fair to Hold

In a report published Friday, Deutsche Bank AG downgraded its rating on Cedar Fair, L.P. (NYSE: FUN) from Buy 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.