Moody's rates 24 Hour Fitness loan B2

Moody's Investors Service said it assigned ratings to 24 Hour Fitness Worldwide Inc. in connection with the pending acquisition of the company by private equity firm Forstmann Little & Co. Moody's assigned a B2 rating to the proposed $700 million senior secured credit facility, a B2 senior implied rating and a stable outlook.

Moody's said the ratings reflect a significant increase in lease-adjusted leverage pro forma for the acquisition, large growth capital expenditures and increasing competition in the fitness industry.

The ratings also reflect solid operating performance, a strong market position, growth opportunities in the fitness industry and good liquidity, the agency said.

The new credit facility includes a $100 million revolving credit facility due 2011 and a $600 million tranche B term loan facility due 2012, both rated B2.

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