Planet Fitness Kicks Off $800 Million Debt Sale

(Bloomberg) — Planet Fitness, a gym chain, on Monday started selling $800 million of bonds backed by most of the company’s assets, the latest in a string of recent deals known as whole business securitizations.

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Guggenheim structured the deal and is helping sell the fixed-rate bonds, which comes in two portions of $400 million 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 securitization, 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 $570 million after combining.

This is the latest in a series of whole business securitizations issued by Planet Fitness. In January 2022, it sold a $975 million deal, on which Guggenheim was also sole structuring advisor and bookrunner.

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 $3.35 billion offering, which set a record for the type of securitization.

A representative from Guggenheim declined to comment. Planet Fitness didn’t return a request for comment.

(Corrects size of offering in first paragraph)

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