24 Hour Fitness flexes $850 million term loan B to Libor plus 375 bps

By Sara Rosenberg

New York, May 19 - 24 Hour Fitness Worldwide Inc. reduced pricing on its $850 million seven-year covenant-light term loan B to Libor plus 375 basis points from Libor plus 400 bps, according to a market source.

Also, the original issue discount on the term loan firmed at 99, the wide end of the 99 to 99½ talk, and the 101 soft call protection was extended to one year from six months, the source said.

Furthermore, the MFN sunset provision was eliminated and the incremental allowance was lowered to $250 million from $300 million, the source continued.

The term loan still has a 1% Libor floor.

The company's $1 billion credit facility (Ba3/B+) also includes a $150 million revolver.

Recommitments were due at 5 p.m. ET on Monday, the source added.

J.P. Morgan Securities LLC is the lead bank on the deal.

Proceeds will be used to help fund the buyout of the company by AEA Investors and Ontario Teachers' Pension Plan from Forstmann Little & Co.

Other funds for the transaction will come from $500 million of senior notes.

24 Hour Fitness is a San Ramon, Calif.-based fitness-club operator.

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