Moody's upgrades Life Time

Moody's Investors Service said it raised Life Time, Inc.'s corporate family rating to B3 from Caa1, probability of default rating to B3-PD from Caa1-PD, the rating for its first-lien senior secured credit facilities and senior secured notes to B2 from B3, and the rating for the company's senior unsecured notes to Caa2 from Caa3. Additionally, Moody's assigned a speculative grade liquidity rating of SGL-3.

The upgrade follows the company's initial public offering transaction on Oct. 7, Moody’s said. After fees and expenses, the company used $570 million of the proceeds to pay down outstanding debt on its first-lien term loan with the remaining $90 million added to balance sheet as cash.

“The reduction in debt, cash interest expense and leverage, and increase in balance sheet cash provides greater financial flexibility to manage future weakness in membership and revenues, and to fund the company's meaningful new club opening strategy. Moody's considers the company's willingness to issue equity to pay down debt as a positive governance consideration, and this was a key factor supporting the upgrade,” the agency said in a press release.

The outlook is stable.

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