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Tivity Health (PRNewsfoto/Tivity Health, Inc)

Analysts at Moody’s Investors Service on Friday cut their rating on the debt of Tivity Health by two levels, in part because the company’s Nutrisystem weight-loss business may not benefit proportionally from the rise in at-home food consumption caused by the spread of COVID-19.

In a note to investors, the Moody’s researchers say cash flows at Franklin-based Tivity also will suffer due to the shutdowns of gyms and recreation centers that host the company’s SilverSneakers fitness programs for seniors.
 
Those pressures, the firm says, are likely to ease once gyms reopen. Potentially longer-lasting, though, is the impact lower consumer incomes and wealth might have on SilverSneakers and Nutrisystem. The latter business has struggled significantly in the year since Tivity completed its acquisition, forcing the company to write down its value by more than $377 million.
 
The Moody’s call, which includes a ‘negative’ outlook, affects up to $1.3 billion in Tivity debt. At B3, Tivity’s debt is now rated one notch above Moody’s C-class ratings, which are judged to be in poor standing and have “very high” credit risk versus being viewed as speculative and having only high risk.

Tivity’s shares (Ticker: TVTY) soared more than 80 percent last week to close at $7.07 after falling more than $13 to below $3 in the previous few weeks. Before announcing its Nutrisystem impairment — and the departure of CEO Donato Tramuto — on Feb. 19, the stock was changing hands at nearly $23.

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