S&P upgrades Fitness loans

S&P said it raised the issue-level ratings on Fitness International LLC's term loan B due July 2020, revolving credit facility due April 2020 and term loan A due April 2020 to BB- from B+ and revised the recovery rating to 2 from 3.

The 2 recovery rating indicates 70% to 90% expected default recovery.

The company is seeking an amendment to its credit agreement to reduce pricing on its existing term loan B and plans to prepay $100 million of the term loan B using revolver borrowings, S&P said.

The prepayment will reduce the outstanding amount of the term loan B to $1.031 billion, the agency said.

This transaction will improve recovery prospects for secured lenders because there will be less secured debt outstanding in the simulated default scenario as a result of the term loan prepayment, S&P said.

The company’s B+ corporate credit rating is unchanged.

Although the reduction in interest expense would modestly improve interest coverage, the transaction is leverage neutral, the agency said.

© 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.