Daily News: August 24, 2012

Deutsche, Keybanc Complete Repricing of Term Loan for Town Sports

Town Sports International Holdings, Inc. announced that it has successfully completed a repricing of its currently outstanding $270.7 million senior secured term loan, reducing current interest rates on the term loan by a total of 125 basis points. The repricing was effected through an amendment to the company’s existing credit agreement.

Deutsche Bank Trust Company Americas was the administrative agent, and Keybanc was documentation agent.

The amendment reduced the applicable margin on the initial term loans from 4.50% to 3.50% for Base Rate Loans and from 5.50% to 4.50% for Eurodollar Loans and reduced the interest rate floor on the initial term loans from 2.50% to 2.25% for Base Rate Loans and from 1.50% to 1.25% for Eurodollar Loans. The credit agreement was also amended to convert the existing voluntary prepayment penalty from a 101 hard call provision, originally scheduled to end in May 2013, to a 101 soft call provision ending in August 2013. All other principal provisions, including maturity and covenants under the company’s existing credit agreement, comprised of the term loan facility and a $50 million revolving credit facility, remain unchanged.

The company expects to incur approximately $4.1 million in fees and expenses in connection with the amendment, including a 1% amendment fee of $2.7 million and $1.4 million of related bank and legal fees.

Dan Gallagher, CFO, commented: “We have greatly improved the company’s credit profile over the past year and are pleased we were able to complete this re-pricing, saving approximately $3.4 million of cash interest costs in 2013.”

New York-based Town Sports International Holdings, Inc. is an owner and operator of fitness clubs in the Northeast and mid-Atlantic regions of the United States.

Previously on abfjournal.com:

Deutsche, KeyBanc Arrange $350 Million Facilities for Town Sports, Thursday, May 12, 2011