Town Sports International Holdings Inc. was downgraded today by S&P Global Ratings to Selective Default, from CC and a negative outlook, after the company failed to repay its $14.2 million outstanding revolver balance when due Aug. 14.

The company had said in a Form 8-K filed on Aug. 20 that the failure to pay the revolver balance is an event of default under its 2013 credit agreement and that the company is negotiating with its lenders regarding either extending the revolver's maturity or forbearance to prevent lenders from accelerating the loan.

S&P Global Ratings held the rating of the company's senior secured term loan at CC because it assumes the company is current on its term loan, noting that the company did not disclose missing a term loan interest payment.

Previously the company had said it expects to be unable to make its August revolver and November term loan payments, noting that it would require $80 million in financing to cover any bankruptcy filing costs and operational shortfalls.

As of Dec. 31, 2019, Town Sports owns and operates 186 fitness clubs concentrated in the Northeast and Mid-Atlantic regions of the U.S., including New York Sports Clubs, Boston Sports Clubs, Washington Sports Clubs and Philadelphia Sports Clubs. Other brands include Lucille Roberts and Total Woman Gym and Spa.