Houghton Mifflin seeks $250 million term loan, extension of maturities

By Sara Rosenberg

New York, May 10 - Houghton Mifflin Harcourt Publishers Inc. is looking to get a $250 million incremental term loan (Caa1/NA/B) and extend the maturity on its existing term loan debt, according to a market source.

The incremental term loan and extended term loan due May 2017 is being talked at Libor plus 525 basis points with a 1.25% Libor floor, the source said. The incremental loan is being offered at an original issue discount of 99.

By comparison, the non-extended term loan due June 2014 is priced at Libor plus 575 bps.

J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC and Wells Fargo Securities are the lead banks on the deal.

Proceeds from the incremental term loan will be used to pay down existing term loan borrowings.

In addition, the company plans on using a portion of the proceeds from an offering of $1.35 billion of senior secured notes to repay some term loan debt.

Remaining proceeds from the notes will be used to repay an accounts receivable securitization facility and for general corporate purposes.

Houghton Mifflin is a Boston-based educational publisher in the K-12 market.

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