Moody’s assigns 24 Hour Fitness Caa1

Moody’s Investors Service said assigned new ratings to All Day AcquisitionCo, LLC (24 Hour Fitness), including a Caa1 corporate family rating and Caa1-PD probability of default rating in connection with its post-bankruptcy exit financing. Concurrently, Moody’s assigned a B3 rating to its proposed $200 million senior secured term loan due 2026.

“24 Hour Fitness’s Caa1 CFR broadly reflects its weak liquidity over the next 12 to 18 months because of the dependence on a reopening and quick ramp-up of paid membership at California gyms within the next few months to avoid a depletion of cash,” the agency said in a press release.

24 Hour Fitness Worldwide Inc. filed for Chapter 11 bankruptcy on June 15. and emerged from Chapter 11 on Dec. 30. At emergence, the company reduced its debt relative to the pre-chapter 11 level ($1.4 billion) by about 83% to about $240 million.

The outlook is negative.

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