Moody's rates Knowledge Learning notes B3

Moody's Investors Service said it assigned a B3 rating to Knowledge Learning Corp.'s new $260 million senior subordinated notes due 2015.

The proceeds from the issuance will be used to refinance the $250 million senior subordinated bridge notes which were issued on Jan. 17 in accordance with the financing of the company's $1.1 billion acquisition of Kindercare Learning Centers Inc.

Moody's said the ratings reflect the high pro forma leverage of the company. The ratings also reflect the company's strong market position as the leading for-profit provider of early childhood education services; expected cost improvements from the integration of recently acquired Kindercare of up to $30 million due to the streamlining of overhead, including personnel; the potential to increase occupancy and profitability in certain markets through the rationalization of duplicate facilities; the introduction of new products and services and the expansion of existing businesses; and the management team's commitment and focus on improving EBIT return on assets.

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