24 Hour Fitness talks $500 million eight-year notes to yield 8%-8¼%; pricing Tuesday

By Paul A. Harris

Portland, Ore., May 19 - 24 Hour Fitness Worldwide Inc. talked its $500 million offering of eight-year senior notes (expected ratings Caa1/CCC+) to yield 8% to 8¼%, according to a market source.

Books close at 5 p.m. ET on Monday, and the deal is set to price on Tuesday.

J.P. Morgan Securities LLC, Deutsche Bank Securities Inc. and Morgan Stanley & Co. LLC are the joint bookrunners.

The Rule 144A and Regulation S for life notes become callable after three years at par plus 75% of the coupon.

Proceeds will be used to help fund the buyout of the San Ramon, Calif.-based fitness-club operator by AEA Investors and Ontario Teachers' Pension Plan from Forstmann Little & Co.

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