Bally Total Fitness receives consents from holders of further 9 7/8% notes bringing total to 92.68%

New York, Nov. 14 - Bally Total Fitness Holding Corp. said it received further consents from holders of its 9 7/8% senior subordinated notes due 2007, bringing the total to 92.68%.

The company previously had consents for 52.2% of the notes.

Of the additional consents, holders of 16.8% of the notes chose to receive the consent fee in stock and 23.9% in cash. Bally issued 464,773 shares for the stock portion, according to an 8-K filing with the Securities and Exchange Commission.

Bally also issued 232,000 shares to Deutsche Bank in payment of its $1 million consent solicitation fee.

Bally began the additional solicitation on Oct. 18, saying it was offering holders of its 9 7/8% notes a second chance to agree to the waiver of the financial reporting covenant under the notes' indentures to Nov. 30.

Terms are the same as the previous successful solicitation of consents from holders of its 10½% senior notes due 2011 and 9 7/8% notes. The additional offer is being conducted under the terms of the earlier consent agreement.

Under the original solicitation, which ended on Sept. 30, Bally received consents from holders of 97.39% of the 10½% senior notes, who received a one-time consent fee of $15.00 in cash per $1,000 principal amount of notes for which consent was delivered.

On Sept. 24, Bally entered into a consent agreement with holders of 52.2% of the 9 7/8% subordinated notes and agreed to begin a new consent solicitation to permit all holders of the subordinated notes to receive payment under the agreement.

Under the consent agreement, subordinated noteholders who are accredited investors and consented to the extension received, at the holder's election, either 9.2308 shares of the company's common stock or $20.00 in cash for each $1,000 principal amount of subordinated notes for which consent was delivered.

Consenting holders who are not accredited investors received $20.00 for each $1,000 principal amount of notes.

The agreement also gave Bally the option to sell additional shares of common stock for cash to a large holder of subordinated notes to fund all or part of the payment to subordinated noteholders electing to receive their consent payment in cash.

The amendment also adds expenses back to the company's EBITDA for financial covenant calculations, excludes consent fees from interest expense in calculating the EBITDA-to-interest expense ratio and reduces the required ratio from 1.70x to 1.65x for the period ending March 31, 2006.

Bally is a Chicago-based health club chain.

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