Moody's cuts Houghton Mifflin

Moody's Investors Service said it downgraded Houghton Mifflin Harcourt Publishers Inc.'s corporate family rating, probability of default rating and debt instrument ratings to Caa3 from Caa2.

The outlook is negative.

Moody's said the downgrade reflects its view that a debt restructuring in the near term is increasingly likely.

The agency said said it considers Houghton Mifflin's capital structure to be unsustainable without a significant rebound in earnings. There is limited time to accomplish this with the looming maturities of the revolver and term loan in December 2013 and June 2014, respectively, and ongoing educational funding pressures at state and local governments.

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