Moody’s upgrades Weight Watchers

Moody's Investors Service said it upgraded Weight Watchers International, Inc.'s corporate family rating to Ba3 from B1, probability of default rating to Ba3-PD from B1-PD, senior secured credit facility ratings to Ba2 from Ba3 and senior unsecured notes rating to B2 from B3.

The speculative grade liquidity rating was affirmed at SGL-1.

The outlook was revised to stable from positive.

"Weight Watchers has a history of boom and bust, but new programs and a shift in emphasis to wellness have led to record subscriber levels and provide it substantial momentum toward achieving its goal of $2 billion in revenues in 2020," Moody's senior credit officer Edmond DeForest said in a news release.

"The announced sale by Weight Watchers' controlling shareholder of some of its shares through an underwritten secondary offering would be a positive credit development. After the share sale, Weight Watchers would no longer be under the control of a financial sponsor.

“Moody's considers financial sponsor-controlled issuers at higher risk of pursuing debt-funded shareholder return strategies, like those pursued by the selling shareholder in the past, than issuers with a widely held public shareholder base."

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