McGraw-Hill talks downsized $400 million eight-year notes to yield in 8% area; books close Thursday

By Paul A. Harris

Portland, Ore., April 28 – McGraw-Hill Global Education Holdings LLC downsized its offering of eight-year senior notes to $400 million from $670 million, shifting $270 million of proceeds to its six-year first-lien covenant-light term loan, according to a syndicate source.

The notes are talked to yield in the 8% area.

Books close at 1 p.m. ET on Thursday, and the Rule 144A and Regulation S for life deal is set to price thereafter.

Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC, BMO Securities, Jefferies LLC, Barclays, Goldman Sachs & Co., RBC Capital Markets and Wells Fargo Securities LLC are the joint bookrunners.

The notes become callable after three years at par plus 75% of the coupon and feature a three-year 40% equity clawback and a 101% poison put.

With the shift of proceeds to the bank loan from the bonds, the loan size grows to $1,575,000,000 from $1,305,000,000.

The New York-based provider of education materials plans to use the proceeds for debt refinancing in order to extend its maturity profile, as well as to merge McGraw-Hill School Education into the McGraw-Hill Global Education credit group, and to fund a dividend.

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