S&P gives Houghton Mifflin CFR B+, loan BB

Standard & Poor's said it assigned its B+ corporate credit rating to Houghton Mifflin Harcourt Co. (HMH).

The outlook is stable.

At the same time, the agency assigned its BB issue-level rating to the company's planned $500 million senior secured term loan with a recovery rating of 1, indicating an expectation for very high (90% to 100%) recovery for lenders in the event of a payment default.

"Our corporate credit rating on HMH reflects our assessment of the company's well-recognized brands, its leading position, yet narrow product focus, in the el-hi print and digital educational publishing market, and the industry's reliance on state and local government funding," S&P credit analyst Thomas Hartman said in a news release.

"The rating also reflects our view of the company's good free operating cash flow generation and payback credit metrics, and our expectation that leverage will remain below 5x; however, we view HMH as having an aggressive financial policy."

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.