Moody's might upgrade Bright

Moody's Investors Service said it placed Bright Horizons Family Solutions LLC's B2 corporate family and probability of default ratings on review for possible upgrade and assigned B1 (LGD3, 31%) ratings to its proposed $100 million senior secured revolving credit facility due 2018 and proposed $815 million senior secured term loan B due 2020.

Proceeds from the proposed credit facilities will be used to refinance existing debt.

The review for possible upgrade was prompted by the company's plan to hold an initial public offering of common shares and use the proceeds to redeem Bright Horizons Capital Corp.'s $199 million of 13% senior notes due 2018.

Moody's said it favorably views the IPO/refinancing to the extent that it reduces financial leverage, materially lowers interest expense, increases revolving credit facility capacity and extends debt maturities. The agency estimates that the transactions reduce pro forma financial leverage to 5.2 times from 5.6 times through the 12 months ended Sept. 30.

If the transactions are completed, the agency plans to upgrade the corporate family rating to B1.

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