S&P lowers Town Sports

Standard & Poor's said it lowered its corporate credit and issue-level ratings on Town Sports International Holdings Inc. and its operating subsidiary, Town Sports International Inc. The corporate credit rating was lowered to B from B+.

The outlook is stable.

The agency said the downgrade is based on its expectation of weak operating performance in 2009 because of the recession and the consequences for credit measures.

The B rating reflects the company's high leverage and S&P's longer-term concerns about market saturation, the agency said.

In S&P's view, Town Sports' good competitive position in its four markets and high margins relative to its peers' only partially offset these factors.

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