Moody’s trims 24 Hour Fitness

Moody’s Investors Service said it downgraded 24 Hour Fitness Worldwide, Inc.’s ratings including its corporate family rating to Caa3 from Caa1, probability of default rating to Caa3-PD from Caa1-PD, first-lien bank credit facilities to Caa3 from B2 and senior unsecured notes to C from Caa2. The outlook is stable.

“The downgrade reflects 24 Hour Fitness’ rapidly deteriorating operating performance and the resultant very high leverage, weak liquidity and high likelihood of a distressed exchange or other default. The company’s negative membership trends, very high interest burden and negative free cash flow prior to the coronavirus outbreak, as well as approaching maturities provide limited flexibility to manage through the crisis,” said Moody’s in a press release.

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