S&P gives HM Rivergroup B-, loan B

Standard & Poor's said it assigned its B- corporate credit rating and stable outlook to HM Rivergroup plc and subsidiary Riverdeep Interactive Learning USA Inc.

At the same time, the agency said it assigned a B rating, one notch above the corporate credit ratings on Riverdeep and HM Rivergroup, with a recovery rating of 1, to Riverdeep's $1.82 billion senior secured credit facilities, indicating a high expectation of full recovery of principal in the event of a payment default.

The facilities consist of a $250 million revolving credit facility due 2012 and a $1.57 billion term loan B due 2013, the agency said.

According to S&P, the ratings on HM Rivergroup reflect the company's good business positions in the educational publishing industry, offset by heightened financial risk resulting from the leveraged acquisition of Houghton Mifflin.

S&P said it is concerned about the deterioration that will occur in the combined group's credit measures and that challenges may arise in integrating the two businesses.

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