Vail bumps private offering to $600M to bolster liquidity

BROOMFIELD — Vail Resorts Inc. (NYSE: MTN) hopes a cash infusion will provide the ski area operator enough liquidity to maneuver over the next two years despite the COVID-19-related early closure of its North American resorts.

After initially announcing Wednesday morning the private offering of $500 million in senior notes, the Broomfield-based firm filed documents with the U.S. Securities and Exchange Commission later in the day to bump that offering up to $600 million.

“In a worst case scenario whereby resort shutdowns persisted, we expect to have sufficient liquidity to fund our operations for up to two years through our existing liquidity and the proceeds from this note’s offering,” according to the SEC filing.

Vail wants to become more liquid during a tough time for the firm. In addition to the resort closures, Vail has seen all close early due to COVID-19, nearly all hourly employees furloughed, and lawsuits from Epic Pass holders demanding refunds.

“While it is not reasonably possible to estimate the ultimate duration or negative financial impact of the COVID-19 pandemic on our business at this time, we expect the COVID-19 pandemic will continue to have an effect on our results of operations and our results will be adversely impacted in a significant manner. With the actions described above, along with the expected proceeds from this note’s offering as well as the incremental flexibility gained under the amendment to the Vail Holdings Credit Agreement, we continue to believe we have a strong liquidity position to mitigate further disruptions from the impacts of the COVID-19 pandemic,” according to the SEC filing.

One of the terms of the company’s amended credit agreement prohibits Vail from making capital expenditures in excess of $200 million per year.

Vail is also prohibited from repurchasing shares or issuing shareholder dividends until the firm demonstrates liquidity of at least $400 million.

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