Moody's may lower Educate

Moody's Investors Service said it placed the long-term debt ratings of Educate, Inc. and the ratings on the senior secured credit facilities of Educate Operating Co., LLC on review for a possible downgrade.

Affected ratings include the company's B1 rated corporate family rating and Educate Operating Co., LLC's Ba3 for the $30 million senior secured revolving credit facility due 2009 and Ba3 for the $159 million senior secured term loan B due 2012.

The review is prompted by the company's weakening cash generation and earnings, which arose in part due to the company's acquisition of a substantial number of franchise centers and the resulting need for incremental training and retention programs for learning center managers, Moody's said it said.

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