Moody's upgrades KinderCare

Moody's Investors Service said it raised Kuehg Corp.'s (KinderCare) first-lien credit facilities, revolver and term loan, to B2 from B3, and its second-lien term loan to Caa2 from Caa3. Concurrently, the agency boosted the corporate family rating to B3 from Caa1 and probability of default rating to B3-PD from Caa1-PD.

“The upgrade of CFR to B3 reflects Moody's expectation that operating performance including enrollment and center occupancy rates will continue to recover in 2022 as the threat from the coronavirus pandemic subsides. KinderCare's lease adjusted debt-to-EBITDA leverage is in the low 5x (including about $161 million American Rescue Plan grants) for the LTM period ended Dec. 31, 2021. Moody's expects leverage including the grants will remain in the 5x debt-to-EBITDA range over the next year due to our expectation for lower level of grants in FY22 as the company's operating performance continues to recover,” the agency said in a press release.

The outlook is stable.

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