Moody’s lowers Kuehg first-lien loans

Moody's Investors Service said it affirmed Kuehg Corp.'s (KinderCare Education) B3 corporate family rating and B3-PD probability of default rating.

The agency also said it downgraded the company's proposed amended first-lien senior secured credit facilities, consisting of upsized $890 million term loan due 2022 and $80 million revolving credit facility due 2020.

The outlook is stable.

In a proposed transaction, KinderCare Education plans to upsize its existing $690 million first-lien senior secured term loan due 2022 by $200 million, Moody’s said.

The proceeds will be used to redeem all of the company's $200 million second-lien senior secured term loan due 2023.

The first-lien credit agreement amendment will reset an incremental debt basket, while all other terms and conditions are expected to remain the same, Moody’s said.

The ratings reflect the debt neutral nature of this transaction, which will have little impact on the company's pro forma credit metrics, the agency said.

KinderCare Education's debt-to-EBITDA ratio is estimated at about 5.3x as of Jan. 2, which is consistent with a B3 company in this segment, Moody’s said.

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