S&P cuts Education Management

Standard & Poor's said it lowered its corporate credit rating on Education Management LLC to B- from B. The outlook is negative.

At the same time, the agency said it lowered the issue-level rating on the company's senior secured credit facilities to B- from B, in accordance with S&P's notching criteria for a 3 recovery rating.

The agency said it also lowered its issue-level rating on the company's senior unsecured and subordinated notes to CCC from CCC+, in conjunction with the corporate credit rating change. The recovery rating on this debt remains at 6, signifying an expectation for negligible recovery.

"The downgrade reflects our expectation that tough economic conditions and new business practices mandated by tighter regulation will cause ongoing enrollment declines over the near term," said S&P credit analyst Chris Valentine in a news release.

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