Town Sports sets Thursday call to launch $370 million credit facility

By Sara Rosenberg

New York, Oct. 23 - Town Sports International LLC scheduled a conference call for 2 p.m. ET on Thursday to launch its proposed $370 million senior secured credit facility, according to a market source.

Deutsche Bank Securities Inc. and KeyBanc Capital Markets Inc. are the lead banks on the deal.

The facility consists of a $45 million five-year revolver and a $325 million seven-year term loan.

Proceeds will be used to refinance an existing credit facility that includes a $50 million revolver due May 11, 2016 and a roughly $315.7 million term loan due May 11, 2018.

The refinancing is expected to lower the company's borrowing costs and provide greater flexibility, including with respect to paying dividends on stock, the company said recently in an 8-K filed with the Securities and Exchange Commission.

Closing is expected to take place in mid-November.

Subject to the completion of the refinancing, the company intends to initiate in December a quarterly dividend payment to stockholders in an amount of $0.14 to $0.16 per share.

Town Sports is a New York-based owner and operator of fitness clubs.

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