Moody's lowers Learning Care

Moody's Investors Service said it downgraded Learning Care Group (US) No. 2 Inc.'s (Learning Care) corporate family rating to Caa1 from B3, probability of default rating to Caa1-PD from B3-PD, the first-lien credit facilities' instrument ratings to B3 from B2, and second-lien term loan rating to Caa3 from Caa2.

The downgrade reflects a forecast for significant revenue and earnings decline in 2020 due to coronavirus- related center closures as well as Moody's projection for a recession in the U.S in 2020, the agency said.

Moody's expects funded debt-to-EBITDA will rise from 5.6x at year-end 2019 to more than 7.5x in 2020. “Learning Care has closed a significant number of its centers as of early April, and Moody's expects efforts to contain the coronavirus will restrict Learning Care's ability to reopen for an unknown period,” the agency said in a press release.

The outlook is negative.

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