S&P gives 24 Hour Fitness loan B+

Standard & Poor's said it assigned 24 Hour Fitness Worldwide Inc.'s proposed $675 million senior secured credit agreement its issue-level rating of B+, one notch above its B corporate credit rating on the company.

It also assigned this proposed debt issue a recovery rating of 2.

The new credit facilities consist of a $600 million term loan and a $75 million revolving credit facility, the agency said.

The company will use transaction proceeds to refinance its existing senior secured credit facilities, the agency added.

At the same time, the agency said it affirmed the B corporate credit rating on 24 Hour Fitness and revised the outlook to stable from negative.

"Our B rating on 24 Hour Fitness reflects the company's aggressive growth strategy, high financial risk, high leverage, weak interest coverage, and competitive pressures in the fitness club industry," said credit analyst Tulip Lim.

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