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Fitch downgrades Houghton Mifflin
Fitch Ratings said it downgraded Houghton Mifflin Harcourt Co.'s long-term issuer default rating to B from B+ and assigned B+/RR3 ratings to the new $250 million senior secured revolver and $1.48 billion senior secured first-lien term loan. Additionally, the company plans to secure an unrated $390 million second-lien term loan.
“These actions follow the announcement of a leveraged buyout by Veritas Capital and Fitch's expectation of increased leverage at Houghton Mifflin following the transaction,” the agency said in a press release.
Veritas will use the loans and $1.274 billion in equity to acquire the Houghton Mifflin.
Concurrently, Fitch withdrew the ratings on subsidiaries, Houghton Mifflin Harcourt Publishers, Inc., Houghton Mifflin Harcourt Publishing Co. and HMH Publishers LLC due to reorganization of the rated entity.
The outlook is stable.
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