Fitness International LLC's Incremental Term Loan Rated 'B+' (Recovery Rating: '2')

BOSTON (S&P Global Ratings) July 18, 2024--S&P Global Ratings today assigned its 'B+' issue-level rating and '2' recovery rating to Fitness International LLC's new $150 million incremental term loan B due 2029. The '2' recovery rating indicates our expectation of substantial (70%-90%; rounded estimate: 75%) recovery for lenders in the event of a default. The company used the proceeds from the term loan to acquire XSport Fitness and reduce its outstanding revolver balance. The acquisition added 35 locations under the XSport Fitness brand in Chicago, New York, and Virginia. The new incremental term loan B has substantially the same terms and is pari passu with the existing senior secured credit facilities. Our estimated recovery prospects for lenders will only modestly

...- We assume the $300 million revolver is 85% drawn at default. Key analytical factors - Year of default: 2027 - EBITDA at emergence: $207 million - EBITDA multiple: 5.5x - Revolving credit facility: 85% drawn at default Simplified waterfall - Net enterprise value (after 5% administrative costs): About $1.1 billion - Obligor/nonobligor split: 100%/0% - Estimated secured debt: About $1.4 billion - Value available for first-lien claim: $1.1 billion - --Recovery expectation: 70%-90% (rounded estimate: 75%) All debt amounts include six months of prepetition interest....

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