S&P assigns 24 Hour Fitness loan B+

Standard & Poor's said it affirmed its B corporate credit rating on 24 Hour Fitness Worldwide Inc.

The outlook is stable.

At the same time, the agency assigned 24 Hour's proposed $150 million revolving credit facility and $850 million term loan its B+ issue-level rating with a recovery rating of 2, indicating an expectations for substantial (70% to 90%) recovery for lenders in the event of default.

S&P said the rating reflects its assessment of 24 Hour's business risk profile as "fair" and the financial risk profile as "highly leveraged," as defined in criteria.

The business risk assessment reflects the competitive nature of the fitness club operating environment, low barriers to entry, high customer attrition, vulnerability to economic cycles and exposure to consumer discretionary spending, which can be volatile, the agency said.

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