S&P lifts Life Time

S&P said it raised its ratings on Life Time Inc. and its senior unsecured notes to B+ from B and its senior secured rating to BB from BB-.

Life Time’s results topped the agency’s 2023 base case with S&P Global Ratings-adjusted debt to EBITDA of 5.3x (compared to the prior forecast of mid-5x), reflecting revenue and S&P Global Ratings-adjusted EBITDA increase of 21.6% and 56%, respectively, the agency noted.

“We now expect the company will decrease S&P Global Ratings lease-adjusted leverage below 5x in 2024 and sustain leverage below 5.5x through 2025. We also expect the company will begin to generate positive free operating cash flow (FOCF) this year. We expect Life Time will be able to fund all capital expenditures (capex) with internally generated cash flows,” S&P said in a press release.

The outlook is stable.

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