Town Sports to redeem some notes with part of IPO proceeds

New York, July 6 - Town Sports International Holdings, Inc. said it plans to redeem some of its $213 million principal amount at maturity of 11% senior discount notes due 2014 and some of the $255 million of 9 5/8% senior notes due 2011 issued by its Town Sports International, Inc. subsidiary using part of the proceeds of a planned initial public offering of common stock.

For each series of notes, the New York-based sports club operator will use the equity clawback provision to redeem up to 35% of the debt. The senior discount notes are redeemable at 111% of accreted value and the senior notes at 109.625% of par.

As of March 31, $138.7 million principal amount of debt would have been eligible for redemption.

Town Sports registered to sell up to $172.5 million of common stock in an S-1 registration statement with the Securities and Exchange Commission Wednesday.

Credit Suisse First Boston and Deutsche Bank Securities will be bookrunners.

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