S&P rates 24 Hour Fitness facility B+

S&P 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 its B+ issue-level rating to 24 Hour's proposed senior secured credit facility, consisting of a $120 million revolver due 2023 and a $850 million term loan due 2025. The 2 recovery rating reflects an expectation for substantial (70%-90%; rounded estimate: 85%) recovery in the event of default.

The agency also affirmed the CCC+ issue level rating on the company's $500 million unsecured notes due 2022. The recovery rating remains 6, indicating an expectation for negligible (0%-10%; rounded estimate: 0%) recovery.

“The affirmation reflects our view that the proposed refinancing transaction is relatively leverage neutral,” S&P said in a news release.

“24 Hour is seeking to refinance its existing senior secured credit facility, which will extend maturities (compared to the previous facility) and add some cash to the balance sheet to fund new club openings, which we view as prudent capital management.”

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.