Houghton Mifflin term loan B downsized as bond deal upsized; bank meeting Tuesday

By Sara Rosenberg

New York, Jan. 9 - Houghton Mifflin's credit facility was restructured with a smaller term loan B following a decision to increase the company's bond offering to $650 million from $500 million, according to a syndicate source. A bank meeting for the credit facility will take place on Tuesday morning.

CIBC, Goldman Sachs and Deutsche Bank are the lead banks on the credit facility.

The term loan B is currently sized at $250 million, down from the original size of $400 million. Pricing on the term loan B, which was originally anticipated at Libor plus 375 basis points is now "to be determined," a syndicate source told Prospect News.

The revolver remained unchanged with a size of $325 million and an interest rate of Libor plus 325 basis points.

Houghton Mifflin opted to upsize the bond deal since there is "strong demand in [the] high yield market particularly for senior notes," the syndicate source said. Furthermore, the "loan market would prefer less senior secured leverage on the margin," he added.

The note offering will now include $250 million of senior notes and $400 million of senior subordinated notes.

Both the credit facility and the high yield offering will be used to help fund Houghton Mifflin's purchase from Vivendi Universal by Thomas H. Lee Partners, Blackstone Group, Bain Capital and Apax Partners.

Houghton Mifflin is a Boston publishing company.

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