NEW YORK: Planet Fitness, a gym chain with its headquartres in the United States, has started selling US$800mil of bonds backed by most of the company’s assets, the latest in a string of recent deals known as whole business securitisations.
Guggenheim structured the deal and is helping sell the fixed-rate bonds, which comes in two portions of US$400mil each.
Both are rated BBB by S&P Global Ratings and Kroll Bond Rating Agency, according to people familiar with the matter.
Proceeds will be used to refinance debt issued in 2018 and potentially return some capital to shareholders, according to the people.
In a whole business securitisation, a company commits substantially all of its revenue-generating assets to an entity called a special purpose vehicle, which then issues bonds to investors.
The asset-backed securities are a popular funding source for businesses that tend to heavily franchise their operations.
Other fitness companies that have borrowed in this market include Self Esteem Brands, which owns Anytime Fitness, and Orangetheory Fitness, which recently raised US$570mil after combining.
This is the latest in a series of whole business securitisations issued by Planet Fitness.
In January 2022, it sold a US$975mil deal, on which Guggenheim was also sole structuring advisor and book-runner.
Companies are selling whole business bonds at the fastest pace since 2021, according to data compiled by Bloomberg News.
This year’s volumes were boosted by Subway’s recent jumbo-sized US$3.35bil offering, which set a record for the type of securitisation.
A representative from Guggenheim declined to comment, while Planet Fitness didn’t return a request for comment. — Bloomberg
