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Moody’s ups Learning Care, loans
Moody's Investors Service said it raised Learning Care Group (US) No. 2 Inc.'s corporate family rating to B2 from B3, probability of default rating to B2-PD from B3-PD and the rating for its first-lien senior secured credit facilities, including a $315 million term loan due 2021 and a $50 million revolving credit facility due 2019, to B1 from B2.
The outlook is stable.
This action concludes the review process initiated on June 16.
The upgrade reflects the reduction in adjusted debt due to changes in Moody's approach for capitalizing operating leases, published on June 15.
As a direct result of this change, Learning Care’s adjusted debt to EBITDA leverage as of March 31, 2015, improved to around 4.5 times from 5.4 times under the prior methodology. In addition, the rating action reflects Learning Care’s positive operating trends, such as revenue and earnings growth and improving credit metrics, including EBITDA less capex to interest coverage of about 1.6 times pro forma for the May 2015 re-pricing transaction.
Moody’s expect the company to continue demonstrating gradual credit metric improvement over the next 12 to 18 months.
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