Debt |
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| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt | Debt Debt consisted of the following:
Refinancing Transaction
On September 20, 2024, Life Time, Inc. and certain of our other wholly-owned subsidiaries entered into a thirteenth amendment to the credit agreement governing our senior secured credit agreement (the “Amended Credit Agreement”). The Amended Credit Agreement provided for, among other things, (i) an increase in the commitments under the revolving credit facility to $650.0 million, (ii) a reduction in the floating interest rate per annum of, at our option, Term Secured Overnight Financing Rate (“SOFR”) plus an applicable margin of 2.50% or a base rate plus 1.50%, and a reduction in the undrawn commitment fee rate from 50 basis points to 25 basis points, and (iii) an extension of the maturity of the revolving credit facility to September 20, 2029, except that the maturity will be (a) October 16, 2025 if at least $100 million remains outstanding on the Senior Secured Notes on such date and (b) January 14, 2026 if at least $100 million remains outstanding on the Senior Unsecured Notes on such date. The applicable margins will (i) decrease 25 basis points upon achieving a certain first lien net leverage ratio and/or (ii) decrease 25 basis points upon achieving public corporate family ratings of Ba3 or BB- from any two of Moody’s, S&P and Fitch, as provided in the Amended Credit Agreement.
Term Loan Facility
On August 19, 2024, we used a portion of the net proceeds we received from an equity offering to pay down an aggregate principal amount of $110.0 million of our Term Loan Facility. For more information regarding our equity offering, see Note 7, Stockholders’ Equity. On September 20, 2024, we paid the remaining aggregate principal amount of $200.0 million of our Term Loan Facility and no borrowings remained outstanding under our Term Loan Facility as of September 30, 2024.
Before we paid off the Term Loan Facility in full on September 20, 2024, loans under the Term Loan Facility were at a floating interest rate per annum of, at our option, SOFR plus an applicable credit adjustment spread ranging from 0.11448% to 0.42826% depending on the duration of borrowing plus the continued applicable margin of 4.00% or a base rate plus 3.00%. We were not required to make principal payments on the Term Loan Facility prior to its maturity.
Revolving Credit Facility
At September 30, 2024, there were $210.0 million of outstanding borrowings under the $650.0 million Revolving Credit Facility, as amended pursuant to the Amended Credit Agreement, and there were $31.2 million of outstanding letters of credit, resulting in total revolver availability of $408.8 million, which was available at intervals ranging from 30 to 180 days at interest rates of SOFR plus an applicable margin of 2.50% or a base rate plus 1.50%. During the second quarter of 2024, we amended the credit agreement governing the Revolving Credit Facility to replace the Canadian Dollar Offered Rate (CDOR), which ceased at the end of June 2024, with the Canadian Overnight Repo Rate Average (CORRA). We do not have any outstanding borrowings in Canadian dollars under the Revolving Credit Facility.
The weighted average interest rate and debt outstanding under the Revolving Credit Facility for the nine months ended September 30, 2024 was 9.36% and $140.6 million, respectively. The highest balance during that same period was $285.0 million.
Construction Loan
On August 15, 2024, we fully paid the remaining principal balance and accrued interest associated with our Construction Loan totaling $28.2 million.
Mortgage Notes
During the nine months ended September 30, 2024, we fully paid at maturity the principal balance and remaining accrued interest associated with two of our Mortgage Notes totaling $62.9 million.
Debt Discounts and Issuance Costs
During the three months ended September 30, 2024, in connection with the Refinancing Transaction, we incurred debt discounts and issuance costs totaling $1.9 million, which are included in Other assets on our condensed consolidated balance sheet at September 30, 2024.
During the three months ended September 30, 2024, in connection with the pay down in full of each of our Term Loan Facility and Construction Loan, we recognized $3.5 million of debt discounts and issuance cost write-offs, which are included in Interest expense, net of interest income in our condensed consolidated statement of operations.
Debt Covenants
We are required to comply with certain affirmative and restrictive covenants under our Credit Facilities, Secured Notes, Unsecured Notes and Mortgage Notes. We are also required to comply with a first lien net leverage ratio covenant under the Revolving Credit Facility, which requires us to maintain a first lien net leverage ratio, if 30.00% or more of the Revolving Credit Facility commitments are outstanding shortly after the end of any fiscal quarter (excluding all cash collateralized undrawn letters of credit and other undrawn letters of credit up to $90.0 million).
As of September 30, 2024, we were either in compliance in all material respects with the covenants or the covenants were not applicable.
Future Maturities of Long-Term Debt
Aggregate annual future maturities of long-term debt, excluding unamortized discounts, issuance costs and fair value adjustments, at September 30, 2024 were as follows:
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