Moody’s rates Spring Education, loans

Moody's Investors Service said it assigned a B3 corporate family rating and a B3-PD probability of default rating to SSH Group Holdings, Inc. (Spring Education Group).

Concurrently, the agency assigned B2 ratings to the proposed senior secured first-lien bank credit facilities and a Caa2 rating to the proposed senior secured second-lien term loan.

The outlook is stable.

Spring is raising the proposed debt facilities, along with new cash equity from its financial sponsor, Primavera Capital, to acquire Nobel Learning Communities, Inc. and the California schools of LePort Montessori.

Moody’s said the B3 corporate family rating is reflective of the entity's very high financial risk including the aggressive approach to the simultaneous Nobel and LePort acquisitions.

“Pro forma for the acquisition of Nobel and LePort, Spring's adjusted debt-to-EBITDA will be approximately 7.9x – a level that is high for the rating category and leaves little cushion for the company to withstand any economic downturn or operational disruptions,” the agency said in a news release.

“The B3 CFR reflects Moody's expectation that Spring will place an emphasis on reducing debt-to-EBITDA such that debt-to-EBITDA will fall below 7.0x by June 30, 2019.”

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