S&P rates Educate loan B+

Standard & Poor's said it assigned its B+ rating and a recovery rating of 4 to Educate Operating Co. LLC's $190 million senior secured bank credit facility and affirmed its B+ corporate credit rating on Educate Inc.

The outlook is stable.

Issue proceeds will be used to refinance existing term debt and pay-in-kind seller notes.

S&P said the ratings reflect Educate's somewhat aggressive financial profile resulting from the 2003 leveraged acquisition of the company and the highly competitive nature of the supplemental educational services industry.

These factors, the agency said, are only partially offset by its niche competitive position in the tutorial services business and historically good operating performance. The ratings also consider the company's strong cash flow dependence on its franchisees.

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