S&P rates Life Time notes CCC-

S&P said it gave Life Time Inc.’s planned $475 million of senior unsecured notes due 2026 a CCC- with a 6 recovery rating (rounded estimate: 0%).

Life Time plans to use the proceeds to refinance its existing $450 million senior unsecured notes due 2023.

The company closed its $925 million senior secured notes due 2026. It issued a new $850 million senior secured term loan B due 2024 after repaying a portion of the outstanding balance on its previous loan. “Because these transactions enabled Life Time to refinance its previous term loan B due 2022 and add additional cash to its balance sheet, we revised our assessment of its liquidity to adequate from less than adequate,” the agency said in a press release.

The added secured debt led S&P to lower its recovery assumptions for secured lenders. “Therefore, we are lowering our issue-level rating on Life Time's revolving credit facility due 2024 to B- from B and revising our recovery rating to 2 (rounded estimate: 80%) from 1,” the agency said.

S&P said Life Time’s CCC+ issuer rating and negative outlook are unchanged.

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