S&P upgrades Town Sports

S&P said it raised its corporate credit rating on Town Sports International Holdings Inc. to B- from CCC+. The outlook is stable.

At the same time, S&P raised its issue-level rating on the company's senior secured credit facility, consisting of a $45 million revolving credit facility maturing in November 2018 and a $325 million ($199.4 million outstanding) term loan due November 2020, to B- from CCC+, in line with the raised corporate credit rating.

S&P said it also revised the recovery rating to 3 from 4, reflecting an increased valuation from recent cash-financed acquisitions. The 3 recovery rating reflects an expectation for meaningful recovery (50%-70%; rounded estimate: 50%) in the event of a payment default.

“The upgrade reflects our forecast for revenue growth, modest EBITDA margin improvement, and a sustained improvement in lease-adjusted debt to EBITDA in the mid-4x area through 2019,” S&P said in a news release.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.