Fitch gives Kuehg BB-, loans BB+

Fitch Ratings said it assigned long-term issuer default ratings of BB- to KinderCare Learning Cos., Inc. and Kuehg Corp. with a stable outlook. Fitch also gave BB+/RR1 ratings to Kuehg's revolving facility and term loan.

“Fitch views the company's solid footprint as the largest private provider of early childhood education (ECE) in the United States by center capacity as a credit positive but acknowledges that this is a highly fragmented, competitive industry. The company had 1,553 early childhood education centers with a student capacity of 213,908 and 788 at before- and after-school sites, respectively, as of Dec. 31, 2022,” the agency said in a statement.

KinderCare wants to refinance its first-lien and second-lien debt with a new seven-year $1.4 billion first-lien term loan. As part of the transaction, the revolver will be upsized to $160 million and extended to a five-year tenor.

“The proposed transaction will significantly extend maturities, increase liquidity and eliminate high-cost second-lien debt,” Fitch said.

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