S&P affirms Houghton Mifflin on add-on

Standard & Poor’s said it affirmed the B+ corporate credit rating on Houghton Mifflin Harcourt Co. as the company is increasing its proposed senior secured term loan due 2021 to $800 million from $500 million.

The proceeds will be used to help fund its acquisition of Scholastic Corp.’s educational technology and services division and to refinance the company’s existing debt, S&P said.

The additional $300 million will be used to fund a portion of the company’s planned $500 million share repurchase program over the next two years.

The agency also said it affirmed the company’s B+ corporate credit rating, along with the BB rating and 1 recovery rating on its senior secured term loan.

S&P said it affirmed the BB rating on the company’s planned $500 million senior secured term loan with a recovery rating of 1, indicating 90% to 100% expected default recovery.

The outlook is stable.

The ratings reflect the company’s well-recognized brands and leading position, S&P said, along with its narrow product focus in the el-hi print and digital educational publishing market.

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