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UPDATE 1-Six Flags to defer interest payment

Mon Jun 1, 2009 5:37pm EDT

* Interest payment to be deferred

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* Payment was due June 1

ATLANTA, June 1 (Reuters) - Theme park operator Six Flags Inc SIXF.OB said on Monday that it plans to defer an interest payment of about $15 million on senior notes due 2014, taking advantage of a 30-day grace period.

The company, which has offered to exchange notes for stock in a bid to reduce debt and stave off a Chapter 11 filing, said in a statement that use of the grace period does not constitute a default. The payment on the 2014 senior notes was due on Monday.

It was at least the third time this year Six Flags said it would defer a bond payment. On May 14, the company made a $7 million interest payment on its 9.75 percent senior notes due 2013 after a 30-day grace period. Around that time, it also said it would defer a semi-annual payment of about $6 million on convertible senior notes due 2015.

Last week, Six Flags extended the deadline for its note tender, saying bids it received were "substantially below" the minimum level it had set. It named a June 12 deadline to give debtholders additional time to consider the offer.

(Reporting by Karen Jacobs; Editing Bernard Orr)

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