Moody's: Spring Education view to negative

Moody's Investors Service said it revised the outlook for Spring Education Group to negative from stable.

“The outlook revision to negative reflects Moody's expectations for earnings decline in 2020 stemming primarily from Spring Education's pre-k segment (about 35% of earnings). The pre-K segment will be hurt by coronavirus related school closures, attrition due to the difficulty of transitioning some students to remote learning at a young age, as well as Moody's projection for a recession in the U.S. in 2020, which could have a prolonged impact on earnings given the company's pre-k business is inherently more cyclical and more dependent on the health of the economy and labor market employment,” the agency said in a press release.

Moody’s also affirmed Spring Education’s B3 corporate family rating and B3-PD probability of default rating. Moody's also affirmed the B2 rating for the company's first-lien senior secured credit facilities and Caa2 rating for its second-lien term loan.

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