Fitch rates MGHE notes B-

Fitch Ratings said it affirmed the issuer default rating of McGraw-Hill Global Education Holdings LLC (MGHE) and McGraw-Hill Global Education Finance, Inc. (MGHE Finance; co-issuer of the secured debt) at B , and the senior secured debt ratings at BB/RR2.

In addition, the agency assigned an issuer default rating of B to the newly created MHGE Parent, LLC and MHGE Parent Finance, Inc., co-issuers of the new $400 million senior unsecured notes due 2019, and a B-/RR6 issue rating to the new notes.

The outlook is stable.

Fitch said MHGE's operating results have performed in line with Fitch expectations. As of March 31, MHGE reduced debt by about $160 million since its LBO, by a combination of mandatory and voluntary debt reduction.

The ratings and outlook are supported by the strong cash flow generating characteristics of the company. The agency expects free cash flow (pro forma for the transaction) to be $75 million to $125 million in 2014 and in 2015.

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