S&P: Knowledge Learning outlook stable

Standard & Poor's said it revised its outlook on Knowledge Learning Corp. to stable from negative and affirmed its ratings, including the B+ corporate credit rating.

The agency said the outlook change reflects Knowledge Learning's improved financial risk profile and solid operating performance. Although debt has not decreased, EBITDA growth in the past year has helped improve credit metrics.

S&P said it remains concerned about the current economic weakness in the United States but believes that the company's strong liquidity, coupled with management's disciplined financial policy, should enable the company to absorb some negative effect on occupancy or tuition rate increases.

The B+ corporate family rating reflects the company's heavy debt burden, narrow operating focus and the difficult operating environment in the child care services sector - concerns that are only partially mitigated by the company's strong liquidity for its rating category, its leading position in a highly fragmented industry and its diversification across its facilities, according to the agency.

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