Moody's cuts KinderCare

Moody's Investors Service said it downgraded Kuehg Corp.'s (KinderCare) 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 Moody's expectations for a 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, which could have a prolonged impact on earnings given the company's business is highly dependent on the health of economy and labor market employment,” the agency said in a press release.

The agency said it forecasts lease-adjusted debt-to-EBITDA to rise from 6.2x at year-end 2019 to well over 7x in 2020.

The outlook is negative.

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