24 Hour Fitness $700 million credit facility tentatively scheduled to launch May 17

By Sara Rosenberg

New York, May 9 - 24 Hour Fitness Worldwide Inc. is tentatively scheduled to hold a general bank meeting on May 17 to launch its proposed $700 million senior secured credit facility, according to a market source.

JPMorgan and Merrill Lynch are the lead banks on the deal, with JPMorgan the left lead.

The facility consists of a $600 million seven-year term loan B and a $100 million six-year revolver, with price talk on both tranches still to be determined, the source said.

The company is holding a pre-launch meeting this Tuesday to give a select group of potential investors an early look at the deal.

"It's for guys they think will take down big pieces of this loan," a buyside source added.

Proceeds from the credit facility will be used to help fund the leveraged buyout of 24 Hour Fitness by Forstmann Little & Co.

In addition to the new loan, Forstmann plans on financing the approximately $1.6 billion transaction with more than $900 million from its equity and subordinated debt funds.

The transaction, which is expected to close in June, is subject to regulatory approval. It is not subject to financing.

24 Hour Fitness is a San Ramon, Calif., fitness center company.

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