S&P lifts Life Time

S&P said it raised its ratings for Life Time Inc. and its senior unsecured notes to B- from CCC+ and its senior secured debt to B+ from B. The recovery ratings remain 4 and 1, respectively.

“The rating action reflects our expectation that Life Time is comfortably covering its fixed charges as of the fourth quarter of 2022 and that lease-adjusted leverage could be in the mid- to low-6x area in 2023. Our base-case forecast incorporates the expectation that the company will end 2023 with dues and center memberships up approximately 10% compared with year-end 2022, which translates to memberships down approximately 5%-7% compared with year-end 2019,” S&P said in a press release.

The agency said it now projects the company to end 2022 with leverage of around 7.7x and leverage in 2023 to decline to the mid- to low-6x area.

The outlook is positive.

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