Bulletin: Bright Horizons Family Solutions LLC's Term Loan Repricing Reduces Interest Expense In Leverage-Neutral Transaction

NEW YORK (S&P Global Ratings) Dec. 2, 2024—S&P Global Ratings today said that Bright Horizons Family Solutions LLC's (BB/Stable/--) repricing of its senior secured term loan B (TLB) due 2028 will modestly reduce its interest expense. In conjunction with the repricing, Bright Horizons intends to reduce the TLB by $84 million through a revolver draw. The transaction is leverage neutral and does not affect the company's credit profile. Our 'BB+' issue-level rating and '2' recovery rating on the company's senior secured debt are unchanged. The '2' recovery rating indicates our expectation for substantial (70%-90%) recovery in the event of a payment default. Our 'BB' issuer credit rating and stable outlook on Bright Horizons are also unchanged, which reflects our expectation

...- Our assumption also considers that at least $340 million of borrowings will be outstanding under its revolving credit facility by the time Bright Horizons defaults, which reflects 85% utilization of the $400 million commitment. Simulated default assumptions - Simulated year of default: 2029 - EBITDA at emergence: About $176 million - EBITDA multiple: 6x Simplified waterfall - Net enterprise value (after 5% administrative costs): About $1,056 million - Valuation split (obligors/nonobligors/unpledged): 75%/25%/0% - Secured first-lien debt claims: About $1.2 billion - --Recovery expectations: 70%-90% (rounded estimate: 80%) All debt amounts include six months of prepetition interest....

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