Research Update: Fitness International LLC 'B+' Rating Affirmed; Outlook Stable; Senior Secured First Lien Rated 'BB-' (Recovery: 2)

U.S. fitness club operator Fitness International LLC plans to raise $1,937.5 million in new senior secured credit facilities, consisting of a $337.5 million revolver due 2023, $900 million term loan A due 2023, and a $700 million term loan B due 2025. It will use the proceeds to repay its existing credit facility and repurchase all remaining institutional ownership through retiring the remainder of minority financial sponsors preferred equity. We view this transaction as leverage neutral as we considered the preferred equity being redeemed as debtlike, and already included it in our measure of adjusted leverage. We are affirming our 'B+' corporate credit rating on Fitness International LLC. We are assigning a 'BB-' issue-level rating and '2' recovery rating to

...+ U.S. fitness club operator Fitness International LLC plans to raise $1,937.5 million in new senior secured credit facilities, consisting of a $337.5 million revolver due 2023, $900 million term loan A due 2023, and a $700 million term loan B due 2025. It will use the proceeds to repay its existing credit facility and repurchase all remaining institutional ownership through retiring the remainder of minority financial sponsors preferred equity. + We view this transaction as leverage neutral as we considered the preferred equity being redeemed as debtlike, and already included it in our measure of adjusted leverage. + We are affirming our 'B+' corporate credit rating on Fitness International LLC. + We are assigning a '##-' issue-level rating and '2' recovery rating to the proposed senior secured credit facility. + The stable outlook on Fitness International LLC reflects our expectation for good operating performance through 2018 and our belief that the company will not likely engage in...

Research Update