S&P gives Life Time notes, loan B-

S&P said it gave B- ratings and 2 (rounded estimate: 85%) recovery ratings to Life Time Inc.’s planned $750 million of senior secured notes due 2026 and planned $925 million term loan B commitment due 2024.

Concurrently, S&P lowered Life Time’s $358 million senior secured revolver to B- from B and revised the recovery rating to 2 (rounded estimate: 85%) from 1 (rounded estimate: 95%). The 2 rating reflects incremental secured debt in the capital structure and weaker recovery prospects for senior secured lenders upon completing the proposed transactions, S&P said.

The company also plans to amend and extend its senior secured credit facility, pushing the revolver maturity to September 2024 from August 2022 and the term loan B maturity to December 2024 from June 2022.

Note proceeds will be used to repay $550 million of Life Time’s term loan B, repay about $130 million in balances under its revolving credit facility and add cash to the balance sheet.

S&P also affirmed Life Time’s CCC+ issuer rating, and the outlook remains negative.

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