TEXT-S&P cuts Education Management LLC rating to 'B'

Overview
-- We believe that U.S. for-profit post-secondary school operator
Education Management LLC will remain under pressure from tough regulations and
weak economic conditions.
-- We expect persistent enrollment declines to result in weaker credit
metrics, a narrow cushion under financial covenants, and lower cash flow
generation.
-- We are lowering our long-term corporate credit rating on the company
to 'B' from 'BB-'.
-- The negative rating outlook reflects our view that enrollment declines
will persist in fiscal-year 2013.

Rating Action
On Sept. 21, 2012, Standard & Poor's Ratings Services lowered its corporate
credit rating on Pittsburgh, Pa.-based for-profit post-secondary school
operator Education Management LLC to 'B' from 'BB-'. The rating outlook is
negative.

At the same time, we revised our recovery rating on the company's senior
secured credit facilities to '3', reflecting our expectation for meaningful
(50% to 70%) recovery for lenders in the event of default, from '2' (70% to
90% recovery expectation). We lowered our issue-level rating on this debt to
'B' (at the same level as the 'B' corporate credit rating on the company),
from 'BB', in accordance with our notching criteria for a '3' recovery rating.

We also lowered our issue-level rating on the company's senior unsecured and
subordinated notes to 'CCC+' from 'B', in conjunction with the corporate
credit rating change. The recovery rating on this debt remains at '6' (0% to
10% recovery expectation).

Rationale
The downgrade reflects our expectation that tough economic conditions and new
business practices mandated by tighter regulation will cause ongoing
enrollment declines over the near term. We lowered our previous expectations
for revenue, EBITDA, and cash flow after the company recently provided public
guidance for fiscal-year 2013 ending June 30. Given the fixed costs of the
business, we expect enrollment declines will lead to weaker credit metrics,
lower cash flow generation, and tight financial covenants over the next 12 to
18 months. There is also a springing maturity to the senior secured credit
facilities, which would be accelerated to March 1, 2014, if the company does
not refinance or repay the $375 million notes due June 2014 prior to this date.

Our 'B' rating reflects Education Management's dependence on Title IV federal
student loan programs and students' willingness to take on debt despite weak
economic conditions and high unemployment. We expect the company's revenue and
EBITDA trends to remain under significant pressure in fiscal-year 2013 and
potentially beyond, as changes in marketing practices, negative publicity, and
increased disclosure requirements to potential students hurt enrollments.

We view Education Management's business risk profile as "vulnerable" (based on
our criteria) because of the severe pressure of regulatory risk on its good
market position and business fundamentals. We assess the company's financial
risk profile as "aggressive," because we expect debt leverage between 4x to 5x
and minimal discretionary cash flow generation relative to total debt levels.

Education Management is one of the leading for-profit post-secondary education
providers, offering both traditional and online programs in career-oriented
disciplines. The company directly or indirectly derived 85% of its fiscal-year
2012 net revenues from Title IV funding. We consider this high exposure to
federal student lending as a long-term risk for the company because
legislative or regulatory actions that result in a substantial reduction in
funding significantly hurt its profits. Crucial issues relate to the adverse
consequences of the elimination of the safe harbor provision on incentive
compensation for schools' student recruiters. In addition, it is now more
difficult for some students to qualify for federal funding, based on their
family credit histories. In June 2012, a U.S. District Court vacated possible
rules on gainful employment. However, the potential for future legislation or
regulation remains a key risk to the rating.

Historically, annual double-digit gains in same-school enrollment, brisk
growth in online programs, and increases in average annual tuition led to
healthy EBITDA growth. In recent quarters, changes in recruiting practices,
adverse publicity, and broad economic weakness have resulted in high
single-digit percent declines in revenue, and even greater EBITDA declines. We
expect enrollment declines to persist in fiscal-year 2013 as a result of these
factors and have limited visibility into when or if declines could moderate.

Under our base-case scenario, we expect a fiscal-year 2013 revenue decline in
the high-single-digit percent range and a roughly 20% EBITDA decline. This
incorporates our assumption that total enrollments will decrease at a mid- to
high-teens percentage rate in 2013. Declines are reducing capacity utilization
and creating pressure to discontinue programs or even shut down campuses. We
expect the EBITDA margin to contract by roughly 150 basis points in
fiscal-year 2013, as we see limited flexibility to reduce costs to offset top
line pressure.

In the fourth fiscal quarter ended June 30, 2012, the company's revenue
declined 8.1% year over year, largely as a result of enrollment declines.
During the quarter, total enrollment declined 9.3%, while new enrollment
declined 20.1%. Over the same period, EBITDA plummeted 33%, primarily as a
result of higher educational services and general and administrative expenses
from new fixed-cost compensation plans. The EBITDA margin for the 12 months
ended June 30, 2012, was 18.9%, down sharply from 22.9% a year ago, reflecting
increasing costs.

For the fiscal year ended June 30, 2012, lease-adjusted debt to EBITDA was
4.5x--up from 3.7x a year ago--because of lower EBITDA more than offsetting
modest debt repayment. The company's debt leverage is just below the 5x
threshold that our criteria generally associate with a "highly leveraged"
financial risk profile, but is likely to rise further. Our assessment
incorporates our expectation that leverage could fall within this range in the
near term. Adjusted EBITDA coverage of interest was 3.2x for the
period--slightly worse than 3.7x a year ago--primarily because of EBITDA
declines.

We expect lease-adjusted debt to EBITDA to increase to the low-5x area in
fiscal-year 2013, given our expectation of continued revenue and EBITDA
declines. We also expect that EBITDA coverage of interest will weaken to the
high-2x area in 2013.

Discretionary cash flow swung negative over the last 12 months as a result of
weak operating trends and partially because the company used balance sheet
cash to collateralize letters of credit required by the Department of
Education. We expect discretionary cash flow to become slightly positive in
2013 as this one-time working capital swing should not occur. Given weak
operating conditions, we expect cash flow generation to be minimal over the
near term and believe discretionary cash flow could be negative in 2013 if the
rate of decline exceeds our current expectations.

Liquidity
We believe that Education Management has "less than adequate" liquidity
sources to cover its cash needs over the next 12 to 18 months. Our assessment
includes the following expectations and assumptions:
-- We expect the company's sources of liquidity over the next 12 to 18
months to be about 1x.
-- We expect the company's net sources to be about zero over the next 12
months.
-- The company would not be able to maintain covenant compliance with a
10% or greater decrease in EBITDA from our base-case scenario over the next 12
months.
-- In our view, the company may not be able to absorb low-probability,
high-impact events over the next 12 to 18 months.

Liquidity sources as of June 30, 2012, included cash balances of $191 million,
and we expect the company to have modest positive discretionary cash flow in
fiscal-year 2013. Uses of cash include capital expenditures of about $100
million in 2013 and a manageable 1% term loan amortization over the next 12
months. The company had a 35% cushion against its total leverage covenant of
4x as of June 30, 2012. In addition, the company had 48% headroom against its
interest coverage covenant. The leverage covenant steps down to 3.5x on Sept.
30, 2012. If recent operating trends do not reverse, we believe the company
may be unable to meet the leverage covenant test over the next 12 months. We
expect the company will need to use cash balances to pay down debt and could
require an amendment to avoid a covenant violation.

Recovery Analysis
For the complete recovery analysis, see our recovery report on Education
Management, to be published following the release of this report.

Outlook
The negative rating outlook reflects our view that enrollment declines will
persist in fiscal-year 2013. Given the current cost structure and current rate
of decline, we could lower the rating if we become convinced that covenant
headroom will fall below 15% without any immediate prospect of recovering. We
could also lower the rating if we become convinced that discretionary cash
flow will become negative on a sustained basis or if enrollment declines are
greater than anticipated in our base case scenario.

Although less likely over the intermediate term, we could consider revising
the rating outlook to stable if the company successfully repays or refinances
its 2014 debt maturities and enrollment trends appear to have stabilized,
leading to revenue and EBITDA growth and meaningful positive discretionary
cash flow.

Related Criteria And Research
-- Methodology: Business Risk/Financial Risk Matrix Expanded, Sept. 18,
2012
-- Liquidity Descriptors For Global Corporate Issuers, Sept. 28, 2011
-- Standard & Poor's Revises Its Approach To Rating Speculative-Grade
Credits, May 13, 2008
-- 2008 Corporate Criteria: Analytical Methodology, April 15, 2008
-- 2008 Corporate Criteria: Rating Each Issue, April 15, 2008
-- 2008 Corporate Criteria: Ratios And Adjustments, April 15, 2008

Ratings List

Downgraded
To From
Education Management LLC
Corporate Credit Rating B/Negative/-- BB-/Negative/--
Senior Secured B BB
Recovery Rating 3 2
Senior Unsecured CCC+ B
Recovery Rating 6 6
Subordinated CCC+ B
Recovery Rating 6 6

Complete ratings information is available to subscribers of RatingsDirect on
the Global Credit Portal at www.globalcreditportal.com. All ratings affected
by this rating action can be found on Standard & Poor's public Web site at
www.standardandpoors.com. Use the Ratings search box located in the left
column.

Primary Credit Analyst: Chris E Valentine, New York (1) 212-438-1434;
chris_valentine@standardandpoors.com
Secondary Contact: Hal F Diamond, New York (1) 212-438-7829;
harold_diamond@standardandpoors.com

No content (including ratings, credit-related analyses and data, model,
software, or other application or output therefrom) or any part thereof
(Content) may be modified, reverse engineered, reproduced, or distributed in
any form by any means, or stored in a database or retrieval system, without
the prior written permission of Standard & Poor's Financial Services LLC or
its affiliates (collectively, S&P). The Content shall not be used for any
unlawful or unauthorized purposes. S&P and any third-party providers, as well
as their directors, officers, shareholders, employees, or agents (collectively
S&P Parties) do not guarantee the accuracy, completeness, timeliness, or
availability of the Content. S&P Parties are not responsible for any errors
or omissions (negligent or otherwise), regardless of the cause, for the
results obtained from the use of the Content, or for the security or
maintenance of any data input by the user. The Content is provided on an "as
is" basis. S&P PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES,
INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR
DEFECTS, THAT THE CONTENT'S FUNCTIONING WILL BE UNINTERRUPTED, OR THAT THE
CONTENT WILL OPERATE WITH ANY SOFTWARE OR HARDWARE CONFIGURATION. In no event
shall S&P Parties be liable to any party for any direct, indirect, incidental,
exemplary, compensatory, punitive, special or consequential damages, costs,
expenses, legal fees, or losses (including, without limitation, lost income or
lost profits and opportunity costs or losses caused by negligence) in
connection with any use of the Content even if advised of the possibility of
such damages.

Credit-related and other analyses, including ratings, and statements in the
Content are statements of opinion as of the date they are expressed and not
statements of fact. S&P's opinions, analyses, and rating acknowledgment
decisions (described below) are not recommendations to purchase, hold, or sell
any securities or to make any investment decisions, and do not address the
suitability of any security. S&P assumes no obligation to update the Content
following publication in any form or format. The Content should not be relied
on and is not a substitute for the skill, judgment, and experience of the
user, its management, employees, advisors, and/or clients when making
investment and other business decisions. S&P does not act as a fiduciary or
an investment advisor except where registered as such. While S&P has obtained
information from sources it believes to be reliable, S&P does not perform an
audit and undertakes no duty of due diligence or independent verification of
any information it receives.

To the extent that regulatory authorities allow a rating agency to acknowledge
in one jurisdiction a rating issued in another jurisdiction for certain
regulatory purposes, S&P reserves the right to assign, withdraw, or suspend
such acknowledgement at any time and in its sole discretion. S&P Parties
disclaim any duty whatsoever arising out of the assignment, withdrawal, or
suspension of an acknowledgment as well as any liability for any damage
alleged to have been suffered on account thereof.

S&P keeps certain activities of its business units separate from each other in
order to preserve the independence and objectivity of their respective
activities. As a result, certain business units of S&P may have information
that is not available to other S&P business units. S&P has established
policies and procedures to maintain the confidentiality of certain nonpublic
information received in connection with each analytical process.

S&P may receive compensation for its ratings and certain analyses, normally
from issuers or underwriters of securities or from obligors. S&P reserves the
right to disseminate its opinions and analyses. S&P's public ratings and
analyses are made available on its Web sites, www.standardandpoors.com (free
of charge), and www.ratingsdirect.com and www.globalcreditportal.com
(subscription), and may be distributed through other means, including via S&P
publications and third-party redistributors. Additional information about our
ratings fees is available at www.standardandpoors.com/usratingsfees.

Any Passwords/user IDs issued by S&P to users are single user-dedicated and
may ONLY be used by the individual to whom they have been assigned.
No sharing of passwords/user IDs and no simultaneous access via the same
password/user ID is permitted. To reprint, translate, or use the data or
information other than as provided herein, contact Client Services,
55 Water Street, New York, NY 10041; (1) 212-438-7280 or by e-mail to:
research_request@standardandpoors.com.

Copyright (c) 2012 by Standard & Poor's Financial Services LLC.
All rights reserved.

In addition to CreditWire, Standard & Poor's also offers RatingsDirect,
the online source for real-time, objective credit ratings and research; and
RatingsXpress, a real-time, customizable digital feed of credit information.

If you are interested in becoming a subscriber and would like more
information on Standard & Poor's real-time information products and services,
please call: HONG KONG (852) 2533-3500; LONDON (44) 20-7176-7176;
MELBOURNE (61) 3-9631-2000; NEW YORK (1) 212-438-7280;
PARIS (33) 1-4420-6758

EOTMARKER

[log off] [home page]
© Reuters Limited 2012 - Server v10.3.0 (build 1)
<< back
Transmission history : 1 alert filed

Time USN User Headline
21/09/2012 WNA5 WE S&P LOWERS RATING ON EDUCATION
16:50:29 40 SCRIP MANAGEMENT TO 'B' FROM 'BB-'
Overview -- We believe that U.S. for-profit post-secondary school operator
Education Management LLC will remain under pressure from tough regulations and
weak economic conditions. -- We expect persistent enrollment declines to result
in weaker credit metrics, a narrow cushion under financial covenants, and lower
cash flow generation. -- We are lowering our long-term corporate credit rating
on the company to 'B' from 'BB-'. -- The negative rating outlook reflects our
view that enrollment declines will persist in fiscal-year 2013. Rating Action On
Sept. 21, 2012, Standard & Poor's Ratings Services lowered its corporate credit
rating on Pittsburgh, Pa.-based for-profit post-secondary school operator
Education Management LLC to 'B' from 'BB-'. The rating outlook is negative. At
the same time, we revised our recovery rating on the company's senior secured
credit facilities to '3', reflecting our expectation for meaningful (50% to 70%)
recovery for lenders in the event of default, from '2' (70% to 90% recovery
expectation). We lowered our issue-level rating on this debt to 'B' (at the same
level as the 'B' corporate credit rating on the company), from 'BB', in
accordance with our notching criteria for a '3' recovery rating. We also lowered
our issue-level rating on the company's senior unsecured and subordinated notes
to 'CCC+' from 'B', in conjunction with the corporate credit rating change. The
recovery rating on this debt remains at '6' (0% to 10% recovery expectation).
Rationale The downgrade reflects our expectation that tough economic conditions
and new business practices mandated by tighter regulation will cause ongoing
enrollment declines over the near term. We lowered our previous expectations for
revenue, EBITDA, and cash flow after the company recently provided public
guidance for fiscal-year 2013 ending June 30. Given the fixed costs of the
business, we expect enrollment declines will lead to weaker credit metrics,
lower cash flow generation, and tight financial covenants over the next 12 to 18
months. There is also a springing maturity to the senior secured credit
facilities, which would be accelerated to March 1, 2014, if the company does not
refinance or repay the $375 million notes due June 2014 prior to this date. Our
'B' rating reflects Education Management's dependence on Title IV federal
student loan programs and students' willingness to take on debt despite weak
economic conditions and high unemployment. We expect the company's revenue and
EBITDA trends to remain under significant pressure in fiscal-year 2013 and
potentially beyond, as changes in marketing practices, negative publicity, and
increased disclosure requirements to potential students hurt enrollments. We
view Education Management's business risk profile as "vulnerable" (based on our
criteria) because of the severe pressure of regulatory risk on its good market
position and business fundamentals. We assess the company's financial risk
profile as "aggressive," because we expect debt leverage between 4x to 5x and
minimal discretionary cash flow generation relative to total debt levels.
Education Management is one of the leading for-profit post-secondary education
providers, offering both traditional and online programs in career-oriented
disciplines. The company directly or indirectly derived 85% of its fiscal-year
2012 net revenues from Title IV funding. We consider this high exposure to
federal student lending as a long-term risk for the company because legislative
or regulatory actions that result in a substantial reduction in funding
significantly hurt its profits. Crucial issues relate to the adverse
consequences of the elimination of the safe harbor provision on incentive
compensation for schools' student recruiters. In addition, it is now more
difficult for some students to qualify for federal funding, based on their
family credit histories. In June 2012, a U.S. District Court vacated possible
rules on gainful employment. However, the potential for future legislation or
regulation remains a key risk to the rating. Historically, annual double-digit
gains in same-school enrollment, brisk growth in online programs, and increases
in average annual tuition led to healthy EBITDA growth. In recent quarters,
changes in recruiting practices, adverse publicity, and broad economic weakness
have resulted in high single-digit percent declines in revenue, and even greater
EBITDA declines. We expect enrollment declines to persist in fiscal-year 2013 as
a result of these factors and have limited visibility into when or if declines
could moderate. Under our base-case scenario, we expect a fiscal-year 2013
revenue decline in the high-single-digit percent range and a roughly 20% EBITDA
decline. This incorporates our assumption that total enrollments will decrease
at a mid- to high-teens percentage rate in 2013. Declines are reducing capacity
utilization and creating pressure to discontinue programs or even shut down
campuses. We expect the EBITDA margin to contract by roughly 150 basis points in
fiscal-year 2013, as we see limited flexibility to reduce costs to offset top
line pressure. In the fourth fiscal quarter ended June 30, 2012, the company's
revenue declined 8.1% year over year, largely as a result of enrollment
declines. During the quarter, total enrollment declined 9.3%, while new
enrollment declined 20.1%. Over the same period, EBITDA plummeted 33%, primarily
as a result of higher educational services and general and administrative
expenses from new fixed-cost compensation plans. The EBITDA margin for the 12
months ended June 30, 2012, was 18.9%, down sharply from 22.9% a year ago,
reflecting increasing costs. For the fiscal year ended June 30, 2012,
lease-adjusted debt to EBITDA was 4.5x--up from 3.7x a year ago--because of
lower EBITDA more than offsetting modest debt repayment. The company's debt
leverage is just below the 5x threshold that our criteria generally associate
with a "highly leveraged" financial risk profile, but is likely to rise further.
Our assessment incorporates our expectation that leverage could fall within this
range in the near term. Adjusted EBITDA coverage of interest was 3.2x for the
period--slightly worse than 3.7x a year ago--primarily because of EBITDA
declines. We expect lease-adjusted debt to EBITDA to increase to the low-5x area
in fiscal-year 2013, given our expectation of continued revenue and EBITDA
declines. We also expect that EBITDA coverage of interest will weaken to the
high-2x area in 2013. Discretionary cash flow swung negative over the last 12
months as a result of weak operating trends and partially because the company
used balance sheet cash to collateralize letters of credit required by the
Department of Education. We expect discretionary cash flow to become slightly
positive in 2013 as this one-time working capital swing should not occur. Given
weak operating conditions, we expect cash flow generation to be minimal over the
near term and believe discretionary cash flow could be negative in 2013 if the
rate of decline exceeds our current expectations. Liquidity We believe that
Education Management has "less than adequate" liquidity sources to cover its
cash needs over the next 12 to 18 months. Our assessment includes the following
expectations and assumptions: -- We expect the company's sources of liquidity
over the next 12 to 18 months to be about 1x. -- We expect the company's net
sources to be about zero over the next 12 months. -- The company would not be
able to maintain covenant compliance with a 10% or greater decrease in EBITDA
from our base-case scenario over the next 12 months. -- In our view, the company
may not be able to absorb low-probability, high-impact events over the next 12
to 18 months. Liquidity sources as of June 30, 2012, included cash balances of
$191 million, and we expect the company to have modest positive discretionary
cash flow in fiscal-year 2013. Uses of cash include capital expenditures of
about $100 million in 2013 and a manageable 1% term loan amortization over the
next 12 months. The company had a 35% cushion against its total leverage
covenant of 4x as of June 30, 2012. In addition, the company had 48% headroom
against its interest coverage covenant. The leverage covenant steps down to 3.5x
on Sept. 30, 2012. If recent operating trends do not reverse, we believe the
company may be unable to meet the leverage covenant test over the next 12
months. We expect the company will need to use cash balances to pay down debt
and could require an amendment to avoid a covenant violation. Recovery Analysis
For the complete recovery analysis, see our recovery report on Education
Management, to be published following the release of this report. Outlook The
negative rating outlook reflects our view that enrollment declines will persist
in fiscal-year 2013. Given the current cost structure and current rate of
decline, we could lower the rating if we become convinced that covenant headroom
will fall below 15% without any immediate prospect of recovering. We could also
lower the rating if we become convinced that discretionary cash flow will become
negative on a sustained basis or if enrollment declines are greater than
anticipated in our base case scenario. Although less likely over the
intermediate term, we could consider revising the rating outlook to stable if
the company successfully repays or refinances its 2014 debt maturities and
enrollment trends appear to have stabilized, leading to revenue and EBITDA
growth and meaningful positive discretionary cash flow. Related Criteria And
Research -- Methodology: Business Risk/Financial Risk Matrix Expanded, Sept. 18,
2012 -- Liquidity Descriptors For Global Corporate Issuers, Sept. 28, 2011 --
Standard & Poor's Revises Its Approach To Rating Speculative-Grade Credits, May
13, 2008 -- 2008 Corporate Criteria: Analytical Methodology, April 15, 2008 --
2008 Corporate Criteria: Rating Each Issue, April 15, 2008 -- 2008 Corporate
Criteria: Ratios And Adjustments, April 15, 2008 Ratings List Downgraded To From
Education Management LLC Corporate Credit Rating B/Negative/-- BB-/Negative/--
Senior Secured B BB Recovery Rating 3 2 Senior Unsecured CCC+ B Recovery Rating
6 6 Subordinated CCC+ B Recovery Rating 6 6 Complete ratings information is
available to subscribers of RatingsDirect on the Global Credit Portal at
www.globalcreditportal.com. All ratings affected by this rating action can be
found on Standard & Poor's public Web site at www.standardandpoors.com. Use the
Ratings search box located in the left column. Primary Credit Analyst: Chris E
Valentine, New York (1) 212-438-1434; chris_valentine@standardandpoors.com
Secondary Contact: Hal F Diamond, New York (1) 212-438-7829;
harold_diamond@standardandpoors.com No content (including ratings,
credit-related analyses and data, model, software, or other application or
output therefrom) or any part thereof (Content) may be modified, reverse
engineered, reproduced, or distributed in any form by any means, or stored in a
database or retrieval system, without the prior written permission of Standard &
Poor's Financial Services LLC or its affiliates (collectively, S&P). The Content
shall not be used for any unlawful or unauthorized purposes. S&P and any
third-party providers, as well as their directors, officers, shareholders,
employees, or agents (collectively S&P Parties) do not guarantee the accuracy,
completeness, timeliness, or availability of the Content. S&P Parties are not
responsible for any errors or omissions (negligent or otherwise), regardless of
the cause, for the results obtained from the use of the Content, or for the
security or maintenance of any data input by the user. The Content is provided
on an "as is" basis. S&P PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED
WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR
DEFECTS, THAT THE CONTENT'S FUNCTIONING WILL BE UNINTERRUPTED, OR THAT THE
CONTENT WILL OPERATE WITH ANY SOFTWARE OR HARDWARE CONFIGURATION. In no event
shall S&P Parties be liable to any party for any direct, indirect, incidental,
exemplary, compensatory, punitive, special or consequential damages, costs,
expenses, legal fees, or losses (including, without limitation, lost income or
lost profits and opportunity costs or losses caused by negligence) in connection
with any use of the Content even if advised of the possibility of such damages.
Credit-related and other analyses, including ratings, and statements in the
Content are statements of opinion as of the date they are expressed and not
statements of fact. S&P's opinions, analyses, and rating acknowledgment
decisions (described below) are not recommendations to purchase, hold, or sell
any securities or to make any investment decisions, and do not address the
suitability of any security. S&P assumes no obligation to update the Content
following publication in any form or format. The Content should not be relied on
and is not a substitute for the skill, judgment, and experience of the user, its
management, employees, advisors, and/or clients when making investment and other
business decisions. S&P does not act as a fiduciary or an investment advisor
except where registered as such. While S&P has obtained information from sources
it believes to be reliable, S&P does not perform an audit and undertakes no duty
of due diligence or independent verification of any information it receives. To
the extent that regulatory authorities allow a rating agency to acknowledge in
one jurisdiction a rating issued in another jurisdiction for certain regulatory
purposes, S&P reserves the right to assign, withdraw, or suspend such
acknowledgement at any time and in its sole discretion. S&P Parties disclaim any
duty whatsoever arising out of the assignment, withdrawal, or suspension of an
acknowledgment as well as any liability for any damage alleged to have been
suffered on account thereof. S&P keeps certain activities of its business units
separate from each other in order to preserve the independence and objectivity
of their respective activities. As a result, certain business units of S&P may
have information that is not available to other S&P business units. S&P has
established policies and procedures to maintain the confidentiality of certain
nonpublic information received in connection with each analytical process. S&P
may receive compensation for its ratings and certain analyses, normally from
issuers or underwriters of securities or from obligors. S&P reserves the right
to disseminate its opinions and analyses. S&P's public ratings and analyses are
made available on its Web sites, www.standardandpoors.com (free of charge), and
www.ratingsdirect.com and www.globalcreditportal.com (subscription), and may be
distributed through other means, including via S&P publications and third-party
redistributors. Additional information about our ratings fees is available at
www.standardandpoors.com/usratingsfees. Any Passwords/user IDs issued by S&P to
users are single user-dedicated and may ONLY be used by the individual to whom
they have been assigned. No sharing of passwords/user IDs and no simultaneous
access via the same password/user ID is permitted. To reprint, translate, or use
the data or information other than as provided herein, contact Client Services,
55 Water Street, New York, NY 10041; (1) 212-438-7280 or by e-mail to:
research_request@standardandpoors.com. Copyright (c) 2012 by Standard & Poor's
Financial Services LLC. All rights reserved. In addition to CreditWire, Standard
& Poor's also offers RatingsDirect, the online source for real-time, objective
credit ratings and research; and RatingsXpress, a real-time, customizable
digital feed of credit information. If you are interested in becoming a
subscriber and would like more information on Standard & Poor's real-time
information products and services, please call: HONG KONG (852) 2533-3500;
LONDON (44) 20-7176-7176; MELBOURNE (61) 3-9631-2000; NEW YORK (1) 212-438-7280;
PARIS (33) 1-4420-6758 NORMAL RATINGS S&P Lowers Rating On Education Management
To 'B' From 'BB-' yes