Research Update: WW International Inc. Outlook Revised To Stable From Negative; Issue-Level Ratings Raised on Debt Paydown

WW International Inc. (WW) kicked off a successful 2020 winter recruitment campaign with double-digit-subscription growth. Additionally, the company managed to preserve credit metrics during a difficult 2019 by improving retention rates and prepaying debt. As a result, the company ended 2019 with leverage in the low-4x area, which we expect it to improve into the mid- to high-3x area by the end of 2020. We are revising our outlook to stable from negative and affirming our 'B+' issuer credit rating. We are raising our issue-level rating on the company's first-lien credit facility to 'BB' from 'BB-', and revising the recovery rating to '1'(rounded estimate: 95%). We are also raising our issue-level rating on the company's unsecured notes to 'B+' from

...- WW International Inc. (WW) kicked off a successful 2020 winter recruitment campaign with double-digit-subscription growth. Additionally, the company managed to preserve credit metrics during a difficult 2019 by improving retention rates and prepaying debt. - As a result, the company ended 2019 with leverage in the low-4x area, which we expect it to improve into the mid- to high-3x area by the end of 2020. - We are revising our outlook to stable from negative and affirming our 'B+' issuer credit rating. - We are raising our issue-level rating on the company's first-lien credit facility to '##' from '##-', and revising the recovery rating to '1'(rounded estimate: 95%). We are also raising our issue-level rating on the company's unsecured notes to 'B+' from 'B', and revising the recovery rating to '4' (rounded estimate: 30%). The actions reflect lower debt balances at the time of our simulated default scenario following debt prepayments in 2019. - The stable outlook reflects our expectations...

Research Update