Research Update: Bright Horizons Family Solutions LLC Outlook Revised To Negative From Positive Amid COVID-19; 'BB-' Rating Affirmed

Bright Horizons Family Solutions LLC has closed more than half of its U.S.-based centers through April because of the COVID-19 pandemic. We believe the company could increase the number of closed centers and extend closures as the virus spreads. Furthermore, S&P Global Ratings economists believe a recession in the U.S. and Europe is likely in 2020, which could dampen a rebound in earnings given the significant rise in U.S. unemployment. We expect Bright Horizons' operating performance will be significantly weaker than our previous expectations, with leverage increasing to the high-3x to low-4x range over the next 12 months, with the potential for a further increase dependent on the extent and severity of the impact of the COVID pandemic on the

...- Bright Horizons Family Solutions LLC has closed more than half of its U.S.-based centers through April because of the COVID-19 pandemic. We believe the company could increase the number of closed centers and extend closures as the virus spreads. Furthermore, S&P Global Ratings economists believe a recession in the U.S. and Europe is likely in 2020, which could dampen a rebound in earnings given the significant rise in U.S. unemployment. - We expect Bright Horizons' operating performance will be significantly weaker than our previous expectations, with leverage increasing to the high-3x to low-4x range over the next 12 months, with the potential for a further increase dependent on the extent and severity of the impact of the COVID pandemic on the company's performance. - We have revised our outlook to negative from positive and affirmed our ratings on Bright Horizons, including our '##-' issuer credit rating. - The negative outlook reflects the possibility of a downgrade if the effects...

Research Update