S&P cuts Town Sports, loan

Standard & Poor's said it lowered its rating on Town Sports International Holdings Inc. to B from B+.

The outlook is negative.

At the same time, the agency lowered its issue-level rating on Town Sports’ $325 million senior secured term loan B due 2020 to B from B+. The recovery rating remains 3, reflecting an expectation that lenders would receive meaningful recovery (50% to 70%) in the event of a payment default.

"The downgrade reflects our revised forecast for run-rate EBITDA to decrease to about $55 million through 2015 and our expectation that debt to EBTIDA, adjusted for operating leases, will increase to about 6x over this period," S&P credit analyst Shivani Sood said in a news release.

"EBITDA fell about 40% in the first six months of the year from the comparable period in 2013 and we expect EBTIDA to drop about 35% for the full year."

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