Education Management LLC's (EDMC) Debt Restructuring is Credit-Negative Event - Moody's

Education Management LLC's, an indirect subsidiary of Education Management (Nasdaq: EDMC), debt restructuring plan is credit negative, but will not result in an immediate change in the company's ratings or outlook. Education Management has a Caa3 corporate family rating (CFR) and a Caa3-PD probability of default rating (PDR), with a negative ratings outlook. However, on execution of the refinancing amendment plan, we will likely view the proposed transaction as a distressed exchange, which we would consider to be a default per Moody's definitions. As such, we would likely lower the company's PDR to LD-PD to reflect the limited default.

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