A group of lenders to Equinox Holdings Inc. are in initial talks to provide additional financing that would give the firm sufficient liquidity to fund
required repayments that were deferred as part of a May amendment to Equinox’s limited guarantee of a $265 million Soul Cycle credit facility due January 2022, according to sources. The proposed loan would also be used to fund operations through near the end of 2021.
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The size of the loan is currently said to be $75 million to $125 million, with the superpriority facility designed to be offered pro rata to all existing first lien holders of Equinox Holdings’ $1.1 billion L+300 bps first lien term loan due March 2024.
Talks are still preliminary, and the size or the structure of the facility may evolve as talks with the company’s advisors progress, the sources said. Lenders have also not engaged in formal conversations with the company and have only had a series of preliminary conversations with the company’s advisors, including Centerview Partners, the sources added.
Under the terms of the amended guarantee, Equinox deferred repayments of the SoulCycle facility that are required under the guarantee from May 15, 2020, to February 2021. Equinox is required to purchase the higher of $72.8 million of the facility or the amount necessary to reduce SoulCycle’s leverage to 5x in any quarter ending before the payment date. Additionally, the amendment to the guarantee provides for a $125 million equity contribution from an affiliate of The Related Companies to cover Equinox’s backstop guarantee of the SoulCycle credit facility.
Equinox and Related Companies did not immediately respond to requests for comment. Centerview Partners declined to comment.
--Alexander Saeedy