Moody's lowers Life Time

Moody's Investors Service said it downgraded Life Time, Inc.'s ratings, including its corporate family rating to B3 from B2, to B3-PD from B2-PD and senior unsecured notes to Caa2 from Caa1. Also, Moody's affirmed the B2 rating for Life Time's senior secured first-lien bank credit facilities.

“The downgrade reflects Moody's expectations for a significant revenue and earnings decline in 2020 due to coronavirus related facility closures as well as the negative effect on consumer income and wealth stemming from job losses and asset price declines, which will diminish discretionary resources to spend on leisure activities and potentially reduce Life Time's membership through attrition and lower new recruitment,” said Moody’s in a press release.

Moody's forecasts Life Time’s debt-to-EBITDA to rise to above 7x in 2020 with high cash burn during facility closures. The facility closures began in mid-March.

The outlook is negative.

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