Moody’s gives 24 Hour Fitness facilities Ba3

Moody’s Investors Service said it assigned Ba3 ratings to 24 Hour Fitness Worldwide, Inc.’s proposed $120 million senior secured revolving credit facility due 2023 and $850 million senior secured term loan due 2025.

At the same time, the agency affirmed 24 Hour Fitness' B2 corporate family rating and B2-PD probability of default rating.

The outlook was changed to stable from negative.

Proceeds from the new term loan will be used to refinance 24 Hour Fitness' existing $818 million term loan, pay related fees and expenses and put cash on the balance sheet.

The agency said the affirmation reflects that this is a leverage neutral transaction which extends 24 Hour Fitness' maturity profile so that its nearest debt maturity is not until March 2022, the springing maturity of the new credit facilities, should greater than $100 million of the senior unsecured notes remain outstanding at that time.

The change in outlook reflects that 24 Hour Fitness is proactively seeking to refinance its revolver well ahead of its current maturity of May 2019, Moody’s said.

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