Moody's introduces new ratings

Moody's Investors Service has introduced two new ratings: probability-of-default ratings and loss-given-default ratings.

The agency's current long-term credit ratings are opinions about expected credit loss that incorporate both the likelihood of default and the expected loss in the event of default. The loss-given-default rating methodology will disaggregate these two key assessments in long-term ratings. The agency said the methodology will also enhance the consistency in its notching practices across industries and will improve the transparency and accuracy of its ratings, as Moody's research shows that credit losses on bank loans have tended to be lower than those for similarly rated bonds.

Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha-numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations.

Loss-given-default assessments (or LGDs) are assigned to individual rated debt issues - loans, bonds and preferred stock - and express Moody's opinion of expected loss as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0%-9%) to LGD6 (loss anticipated to be 90%-100%).

Below is a list of the rating actions for Moody's rated companies, sorted by industry. The rating immediately after the company name denotes the corporate family rating and the percentages next to the LGDs represent the expected loss-given-default rates.

Consumer services

24 Hour Fitness Worldwide, Inc., B2; probability-of-default rating, B2; revolver and term loan, upgraded to Ba3 from B2, LGD3, 31%.

Alderwoods Group Inc., B1; probability-of-default rating, B1; revolver and term loan, upgraded to Ba2 from Ba3, LGD2, 21%; notes, downgraded to B3 from B1, LGD5, 77%.

AMF Bowling Worldwide, Inc., B2; probability-of-default rating, B2; revolver and term loan, upgraded to Ba2 from B2, LGD2, 16%; notes, upgraded to B3 from Caa1, LGD5, 72%.

Bally Total Fitness Holding Corp., Caa1; probability-of-default rating, Caa1; revolver and term loan, upgraded to B1 from B3, LGD1, 8%; senior notes, Caa1, LGD3, 48%; senior subordinated notes, upgraded to Caa3 from Ca, LGD5, 87%.

Central Parking Corp., Ba3; probability-of-default rating, Ba3; term loan and revolver, upgraded to Baa3 from Ba3, LGD2, 15%; convertible trust issued preferreds, B2, LGD6, 93%.

Coinmach Corp., B2; probability-of-default rating, B2; bank facilities, B2, LGD3, 45%. Coinmach Service Corp., notes, Caa1, LGD6, 94%.

Coinstar, Inc., Ba3; probability-of-default rating, B1; revolver and term loan, Ba3, LGD2, 29%.

Educate Inc., B1; probability-of-default rating, B2. Educate Operating Co., LLC, revolver and term loan, upgraded to Ba3 from B1, LGD2, 24%.

Education Management Corp., B2; probability-of-default rating, B2. Education Management LLC, revolver and term loan, B2, LGD3, 44%; senior notes, upgraded to B2 from B3, LGD3, 44%; senior subordinated notes, Caa1, LGD6, 92%.

inVentiv, Ba3; probability-of-default rating, B1; revolver and term loan, upgraded to Ba2 from Ba3, LGD2, 28%.

La Petite Academy, Inc., B2; probability-of-default rating, B2; first-lien loans, upgraded to Ba2 from B1, LGD2, 21%; second-lien loan, B3, LGD4, 69%.

Monitronics, B1; probability-of-default rating, B1; revolver and term loan, upgraded to Ba2 from B1, LGD2, 29%; notes, B3, LGD5, 82%.

North American Membership Group Inc., B2; probability-of-default rating, B2; first-lien term loan, secured revolver and delayed draw term loan, upgraded to B1 from B2, LGD3, 32%; second-lien term loan, Caa1, LGD5, 80%.

Protection One, B2; probability-of-default rating, B2; revolver and term loan, upgraded to B1 from B2, LGD3, 36%; notes, Caa1, LGD5, 89%.

Stewart Enterprises, Inc., Ba3; probability-of-default rating, Ba3; term loan and revolver, upgraded to Ba2 from Ba3, LGD3, 41%; notes, B1, LGD4, 60%.

Town Sports International Holdings, Inc., B2; probability-of-default rating, B2; discount notes, upgraded to Caa1 from Caa2, LGD5, 89%. Town Sports International, Inc., revolver, upgraded to Ba2 from B1, LGD1, 3%; notes, B2, LGD3, 44%.

VCA Antech, Ba3; probability-of-default rating, B1; revolver and term loan, Ba3, LGD2, 29%.

Weight Watchers International, Inc., Ba1; probability-of-default rating, Ba2; revolver and term loan, Ba1, LGD3, 32%. WeightWatchers.com, Ba3; probability-of-default rating, Ba3; first-lien loan, upgraded to Ba2 from Ba3, LGD3, 38%; second-lien loan, downgraded to B2 from B1, LGD5, 89%.

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