Town Sports International Holdings, Inc. (“TSI” or the “Company”) (NASDAQ: CLUB), a leading owner and operator of health clubs located primarily in major cities from Washington, DC north through New England, operating under the brand names “New York Sports Clubs,” “Boston Sports Clubs,” “Washington Sports Clubs” and “Philadelphia Sports Clubs,” today announced credit ratings upgrades by Standard & Poor’s and Moody’s respectively.
On March 22, 2012, Standard & Poor's Ratings Services raised its corporate credit rating on Town Sports International Holdings Inc. to 'B+' from 'B' with a stable outlook. At the same time, Standard &Poor’s raised the issue-level rating on Town Sports' $350 million credit facility, consisting of a $50 million revolver due 2016 and a $300 million term loan due 2018, to 'B+', from 'B'.
On April 2, 2012, Moody's Investors Service upgraded Town Sports International Holdings, Inc.’s corporate family rating to B1 from B2 and the probability of default rating to B2 from B3. Moody’s also upgraded Town Sports International, LLC's (wholly-owned subsidiary of Town Sports International Holdings, Inc) senior secured credit facility rating to Ba3 from B1. The speculative grade liquidity rating was upgraded to SGL-1 from SGL-2. The ratings outlook is stable.
Daniel Gallagher, Chief Financial Officer of TSI stated, “We are pleased with the ratings upgrades we have recently received by both Standard and Poor’s and Moody’s. We have been generating EBITDA growth and increases in free cash flow, while consistently reducing our debt and improving our credit and leverage metrics. Many improvements were made in the business in 2011 and we remain excited about our future prospects.”
Credit ratings are opinions of a rated entity’s ability to meet its ongoing obligations. Credit ratings are not recommendations to buy, sell or hold securities and are subject to revision or withdrawal at any time by the assigning rating agency. Each agency’s rating should be evaluated independently of any other agency’s rating.