Deutsche Bank and BNP Paribas dropped a $50 million "B" loan for Town Sports International last week. The initial $100 million facility now only comprises a $50 million revolver priced at LIBOR plus 4%, which was also the pitched rate on the "B" loan. Town Sports, an owner and operator of 130 health clubs in cities from Washington to New England, decided it would get better execution in the bond market, a banker familiar with the situation said, declining to discuss details of the impending bond deal. The loan was almost fully distributed before it was pulled, she noted. A Deutsche Bank official declined to comment, while a BNP banker did not return calls.
The New York-based company announced earlier this month that it was going to undertake the recapitalization of some or all of its existing debt and preferred stock through refinancing efforts in the bank and high-yield debt markets. This was after postponing recapitalization efforts last December because of unfavorable market conditions. Town Sports' existing senior notes-- $125 million outstanding-- and $45 million in credit facilities mature in the first half of 2004. Calls to Richard Pyle, executive v.p. and cfo, were not returned by press time.