Moody’s cuts Equinox

Moody's Investors Service said it downgraded the first-lien senior secured bank debt rating of Equinox Holdings, Inc. to B1 from Ba3 and affirmed the other ratings, including its B2 corporate family rating following the company's announcement that it was proposing to amend its credit agreement to allow for a $150 million add-on to its term loan.

At the same time, the agency affirmed the probability of default rating at B2-PD and second-lien senior secured debt at Caa1.

The outlook is stable.

Moody’s said the downgrade to the first-lien senior secured bank facility – consisting of a $100 million revolver expiring in 2018 and a pro forma $742 million term loan due 2020 – reflects the increased amount of first lien debt relative to the junior debt below it in the capital structure.

The change in debt mix weakens the recovery prospects of the expanded first-lien debt class in the event of default. According to the agency, it is important to note Equinox's two unrestricted subsidiaries – SoulCycle and Blink – do not have any debt that would take priority over Equinox's debt; therefore, Moody’s continues to view the company's debt as pledged to all assets, including SoulCyle and Blink.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.