S&P boosts Education Management

Standard & Poor's said it raised its corporate credit rating on Education Management LLC to BB- from B+.

The outlook is positive.

The company has been able to reduce leverage recently due to good operating performance, the agency added.

At the same time, the agency said it raised its issue-level ratings on the company's debt by one notch in accordance with its upgrade of the corporate credit rating. Its recovery ratings on these debt issues remain unchanged.

"Our BB- rating reflects Education Management's dependence on federal student loan programs, increasing capital spending for start-up campuses, and the highly fragmented and competitive nature of the for-profit post-secondary education market," said S&P credit analyst Deborah Kinzer.

"The company's good business position and geographic diversity in the for-profit post-secondary education market, historically strong operating performance, and declining (though still high) debt leverage somewhat offset these negative rating factors."

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