Moody's trims WeightWatchers

Moody's Ratings said it downgraded WW International, Inc.'s (WeightWatchers) corporate family rating to Caa1 from B3, probability of default rating to Caa1-PD from B3-PD and senior secured first-lien debt ratings, including the $175 million revolving credit facility due 2026, the $945 million term loan maturing 2028 and the $500 million of notes due 2029 to Caa1 from B3. The agency also lowered WW's speculative grade liquidity rating to SGL-3 from SGL-2.

"Although WW may have returned to sustainable subscriber growth, both revenue and profits fell well short of our prior expectations in 2023, leading to our concern that the company may not be able to grow revenue and generate material free cash flow in 2024 or 2025," said Edmond DeForest, a Moody's senior vice president, in a press release.

Moody’s said it expects WW’s debt to EBITDA to top 10x with limited free cash flow over the next 12 to 18 months.

The outlook is stable.

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