NEW YORK--(BUSINESS WIRE)--
Town Sports International Holdings, Inc. (the "Company") (NASDAQ: CLUB)
today announced that its indirect
wholly-owned subsidiary, Town Sports International, LLC (the "Borrower")
has entered into a $325.0 million term loan facility and a $45.0 million
revolving loan facility. The proceeds from the term loan facility were
used to repay all amounts outstanding under the Borrower's existing
credit agreement and to pay related fees and expenses. None of the
revolving loan facility was drawn upon.
The new term loan facility matures on November 15, 2020 and the new
revolving loan facility matures on November 15, 2018.
Borrowings under the term loan facility and the revolving loan facility,
at the Borrower's option, bear interest at either the administrative
agent's base rate plus 2.5% or a LIBOR rate adjusted for certain
additional costs (the "Eurodollar Rate") plus 3.5%, each as defined in
the new credit agreement. The Eurodollar Rate has a floor of 1.00% and
the base rate has a floor of 2.00%, each with respect to the outstanding
term loans. Commencing with the last business day of the Borrower's
fiscal quarter ending March 31, 2014, the Borrower is required to pay
0.25% of the principal amount of the terms loans each quarter, which may
be reduced by voluntary prepayments. Mandatory prepayments under the new
credit agreement are required with respect to certain asset sales,
insurance recovery and incurrence of certain other debt and, commencing
in 2015, in certain circumstances relating to cash flow for the prior
fiscal year in excess of certain expenditures.
In connection with entering into the new credit agreement, the Borrower
amended and restated its existing interest rate swap arrangement, which
will now have a notional amount of $160 million and will mature on May
15, 2018. The swap will effectively convert $160 million of
variable-rate debt under the new credit agreement to a fixed rate of
5.38%, when including the applicable 3.50% margin described above.
At current interest rates, the Company expects cash payments related to
interest charged on this new credit agreement to be approximately $2.8
million less on an annual basis than annual cash payments required for
interest on the Borrower's existing credit facility. The expected
savings on interest assumes a $9.3 million increase in total term loan
principal outstanding versus the existing facility and the impact of the
interest rate swap described above.
Deutsche Bank Securities Inc. and KeyBanc Capital Markets Inc. served as
joint lead arrangers and joint bookrunning managers for the credit
In addition, the Company's Board of Directors declared a cash dividend
of $0.16 per share, payable on December 5, 2013 to stockholders of
record at the close of business on November 26, 2013 (the "Dividend").
The aggregate amount of the payment to be made in connection with the
Dividend will be approximately $3.7 million, based upon shares of common
stock outstanding as of November 13, 2013.
Robert Giardina, Chief Executive Officer of the Company, commented: "We
are pleased we have completed this refinancing which reduced our
borrowing costs and extended the term on our debt. This refinancing also
provides the Company with more flexibility, including flexibility to
return value to our stockholders in the form of a dividend."
About Town Sports International Holdings, Inc.:
New York-based Town Sports International Holdings, Inc. is a leading
owner and operator of fitness clubs in the Northeast and mid-Atlantic
regions of the United States and, through its subsidiaries, operated 162
fitness clubs as of September 30, 2013, comprising 108 New York Sports
Clubs, 29 Boston Sports Clubs, 16 Washington Sports Clubs (two of which
are partly-owned), six Philadelphia Sports Clubs, and three clubs
located in Switzerland. These clubs collectively served approximately
507,000 members. For more information on TSI, visit http://www.mysportsclubs.com.
Town Sports International Holdings, Inc., New York
Joseph Teklits / Farah Soi
Source: Town Sports International Holdings, Inc.
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