Life Time Secures Funding Boost for Business Growth Plans
Life Time Strengthens Financial Framework
Life Time Group Holdings, Inc. (NYSE: LTH) has made significant strides by completing the refinancing of its revolving credit facility. Through this strategic move, Life Time aims to not only enhance its financial stability but also finance future growth initiatives.
Key Enhancements to Credit Facility
Increased Credit Commitments
The refinancing accomplished a notable increase in commitments, with the revolving credit facility rising from $475 million to $650 million. This upsize allows Life Time to better support its operations while providing a solid foundation for future investments.
Reduced Interest Rates
Additionally, the company successfully lowered the floating interest rate by 100 basis points. Now, the applicable rate is linked to the Term Secured Overnight Financing Rate (SOFR), plus an applicable margin of just 2.50%. This reduction will significantly decrease financial burdens and enhance profit margins.
Strategic Financial Moves
Undrawn Commitment Fee Adjustment
In an effort to further optimize its financial operations, Life Time has reduced the undrawn commitment fee rate to 25 basis points. This adjustment is a strategic benefit as it lowers costs associated with the credit line.
Maturity Extension
The maturity of the revolving credit facility has been extended to 2029. This longer timeline gives Life Time considerable flexibility in managing its debt and aligning its financing strategy with business objectives.
Benefits from Successful Refinancing
As part of this refinancing process, Life Time has drawn on the revolving credit facility to pay off approximately $200 million in outstanding debt from its previous term loan facility. This move eliminates higher interest payments on that debt, which was charged at SOFR plus 4.00%.
The Executive Vice President and Chief Financial Officer, Erik Weaver, expressed optimism regarding the refinancing. He stated that the improvements achieved put Life Time in a strong position to manage its secured and unsecured notes effectively in the months ahead, reinforcing their strategy for growth.
Life Time’s Commitment to Wellness
Life Time (NYSE: LTH) has built a reputation as a leader in the health and wellness industry. With over 175 athletic country clubs across North America, the company is dedicated to empowering individuals to pursue healthier and happier lives. The Life Time Digital app enhances this experience, providing a variety of health programs and resources to support members in their wellness journey.
About the Company
With a workforce of more than 45,000 passionate professionals, Life Time focuses not just on fitness, but who people can become. They host nearly 30 iconic athletic events each year, which complements their commitment to delivering high-quality service within their clubs and communities. Life Time is dedicated to supporting individuals at any age, providing programs catered to everyone from teenagers to seniors.
Frequently Asked Questions
What recent financial move did Life Time Group Holdings make?
Life Time completed the refinancing of its revolving credit facility, increasing commitments and lowering interest rates.
How much did Life Time increase its credit facility?
The company increased its revolving credit facility commitments from $475 million to $650 million.
What is the new interest rate for Life Time's credit facility?
The new floating interest rate is now set at SOFR plus an applicable margin of 2.50%.
How does this refinancing affect Life Time's debt?
This refinancing allows Life Time to pay off approximately $200 million of its previous term loan debt, thereby reducing financial costs.
What is Life Time's mission?
Life Time aims to empower individuals to live healthy and fulfilling lives through a wide array of fitness and wellness programs.
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