Life Time Group Holdings, Inc. Completes $310 Million Refinancing and $45 Million Sale-Leaseback Deal, Upgrades Credit Rating

lifetime fitness health club news story

Life Time Group Holdings, Inc. recently announced the successful completion of the refinancing process for its Term Loan B facility. The refinancing extended the maturity date to January 15, 2026, and increased the facility size from $274 million to $310 million. The additional net proceeds obtained from the refinancing will be used to fully repay the outstanding balance on the company’s $475 million revolver and for general corporate purposes (“Life Time Completes Refinancing, Latest Sale-Leaseback Deal,” Club Industry).

As part of its financial strategy, Life Time also completed a sale-leaseback deal worth $45 million on April 20. This transaction is in line with the company’s plan to execute $300 million in sale-leaseback transactions in 2023. The deal involved a single property and was conducted with an institutional real estate investor who has previously engaged in multiple sale-leaseback transactions with Life Time (“Life Time Completes Refinancing, Latest Sale-Leaseback Deal,” Club Industry).

In addition, Life Time recently shared positive news regarding its credit rating. S&P Global Ratings upgraded the company’s issuer credit rating from ‘B-‘ to ‘B’ following the successful sale-leaseback deal and the announcement of its first-quarter financial results. The upgrade reflects the company’s improving performance, including membership, revenue, and EBITDA trends, as well as its proactive steps to enhance its balance sheet and reduce leverage (“Life Time Announces Sale-Leaseback Deal Worth $45 Million and Upgrades Credit Rating,” Business Wire).

These developments come on the heels of Life Time’s strong first-quarter results. The company reported a revenue increase of 30.2 percent, reaching $510.9 million compared to $392.3 million in the same period the previous year. Net income improved significantly, shifting from a net loss of $38.0 million in Q1 2022 to a net income of $27.5 million in Q1 2023. Adjusted EBITDA also experienced substantial growth, rising to $120.1 million from $40.6 million in the first quarter of the previous year. Based on these positive outcomes, Life Time raised its full-year adjusted EBITDA guidance for 2023 to a range of $470 million to $490 million, an increase of $30 million (“Life Time Completes Refinancing, Latest Sale-Leaseback Deal,” Club Industry) (“Life Time Refinances Term Loan B Facility, Increasing Maturity and Facility Size,” Forbes).