Town Sports International Holdings, Inc. Announces Completion of Refinancing
and Declares a Cash Dividend of $0.16 Per Share
NEW YORK -- November 15, 2013
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 facilities.
In addition, the Company’s Board of Directors declared a cash dividend of
$0.16 per share, payable on December5, 2013 to stockholders of record at the
close of business on November26, 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 November13, 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.”
AboutTown Sports International Holdings, Inc.:
New York-basedTown Sports International Holdings, Inc.is a leading owner and
operator of fitness clubs in the Northeast and mid-Atlantic regions ofthe
United Statesand, through its subsidiaries, operated 162 fitness clubs as
ofSeptember 30, 2013, comprising 108New York Sports Clubs, 29Boston Sports
Clubs, 16Washington Sports Clubs(two of which are partly-owned),
sixPhiladelphia Sports Clubs, and three clubs located inSwitzerland. These
clubs collectively served approximately 507,000 members. For more information
on TSI, visithttp://www.mysportsclubs.com.
Town Sports International Holdings, Inc., New York
212-246-6700 extension 1650
Joseph Teklits / Farah Soi
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