S&P cuts Education Media to CCC

Standard & Poor's said it lowered Education Media & Publishing Group Ltd. and its subsidiary Houghton Mifflin Harcourt Publishers Inc.'s corporate credit rating to CCC from B-.

The outlook is negative.

S&P lowered Houghton Mifflin's first-lien credit facilities to CCC from B and revised the recovery rating to 3 from 2.

"The ratings downgrade reflects our concern about diminished near-term prospects for textbook educational spending; the likelihood, in our view, of continued weak operating performance; and the repercussions for liquidity amid tightening financial covenants," S&P analyst Hal Diamond said in a statement.

The rating also considers the company's heightened financial risk resulting from the December 2007 $4 billion acquisition of the former Harcourt education and trade businesses from Reed Elsevier plc, the agency said.

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