Houghton Mifflin talks $1.48 billion loan at SOFR plus 500-525 bps

By Sara Rosenberg

New York, March 23 – Houghton Mifflin Harcourt Co. launched on Wednesday its $1.48 billion seven-year first-lien term loan (B2/B-/B+) with price talk of SOFR+10 basis points CSA plus 500 bps to 525 bps with a 0.5% floor and an original issue discount of 97 to 97.5, according to a market source.

The first-lien term loan has 101 soft call protection for six months.

Commitments are due at noon ET on April 1, the source added.

BofA Securities Inc., JPMorgan Chase Bank, Deutsche Bank Securities Inc., Macquarie Capital (USA) Inc., Citizens Bank, Goldman Sachs Bank USA, Mizuho, Blackstone and StonePoint are the joint lead arrangers on the first-lien debt.

The company’s $2.12 billion of senior secured credit facilities also include a $250 million five-year revolver (B2/B-/B+) and a $390 million privately placed eight-year second-lien term loan.

JPMorgan is the left lead on the second-lien term loan.

Proceeds will be used with equity to fund the buyout of the company by Veritas Capital for $21 in cash per share, which implies an equity value of about $2.8 billion, and to refinance existing debt.

Closing is expected in the second quarter, subject to regulatory approvals and customary conditions.

Houghton Mifflin is a Boston-based learning technology company.

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