Houghton Mifflin, Cambium, FLY Leasing free to trade; Upland, USI updates surface

By Sara Rosenberg

New York, Nov. 19 – Houghton Mifflin Harcourt Publishers Inc. upsized its term loan B, raised the spread and widened the issue price before breaking for trading on Tuesday, and deals from Cambium Learning Group Inc. and FLY Leasing hit the secondary market too.

In more happenings, Upland Software Inc. increased the size of its incremental first-lien term loan and firmed the original issue discount at the tight end of guidance, USI Inc. tightened the issue price on its incremental term loan B, and Hyperion Insurance Group Ltd. joined this week’s primary calendar.

Houghton reworked

Houghton Mifflin lifted its five-year senior secured term loan B (B3/B/BB-) to $380 million from $330 million, raised pricing to Libor plus 625 basis points from Libor plus 600 bps and modified the original issue discount to 96 from revised talk of 97 and initial talk in the range of 97 to 98, according to a market source.

In addition, the cumulative credit basket leverage ratio for restricted payments and subordinated debt repayments was changed to 2.5x net total leverage from 3x, the source said.

The term loan still has a 1% Libor floor and 101 soft call protection for one year.

Previously in syndication, the Libor floor on the term loan was increased from 0%.

Recommitments were due at 2 p.m. ET on Tuesday.

Houghton hits secondary

Late in the afternoon, Houghton Mifflin’s term loan B freed up for trading and levels were quoted at 96½ bid, 98 offered, another source added.

Citigroup Global Markets Inc., Morgan Stanley Senior Funding Inc., BofA Securities, Inc. and Wells Fargo Securities LLC are leading the deal that will be used with $306 million of senior secured notes ($299,880,000 gross proceeds) to refinance an existing term loan B.

The notes were downsized from $350 million with the term loan upsizing.

As of Sept. 30, the company had about $766 million outstanding under its term loan B due May 29, 2021 priced at Libor plus 300 bps with a 1% Libor floor.

Closing on the refinancing is expected on Friday.

Houghton Mifflin is a Boston-based provider of K-12 core curriculum, supplemental and intervention solutions and professional learning services.

Cambium starts trading

Cambium Learning Group’s fungible $295 million add-on first-lien term loan (B2/B/BB) due Dec. 18, 2026 also broke, with levels seen at 96 bid, 96 3/8 offered before moving up to 96 1/8 bid, 96 5/8 offered, a trader remarked.

Pricing on the add-on first-lien term loan is Libor plus 450 bps with a 0% Libor floor and it was sold at an original issue discount of 96. The debt has 101 soft call protection for six months.

The company is also getting a fungible $93 million add-on second-lien term loan that was privately placed and is priced at Libor plus 850 bps with a 0% Libor floor.

RBC Capital Markets, Barclays and BMO Capital Markets are leading the deal, which will be used to fund the acquisition of AIR Assessment, the student assessment division of the American Institutes for Research.

Closing is subject to regulatory review and other customary conditions.

Cambium, a Veritas Capital portfolio company, is a Dallas-based provider of digital instructional materials to preK-12 districts, schools, teachers and parents.

FLY frees up

FLY Leasing’s $385,364,014 term loan B (Ba2/BBB-) due Aug. 9, 2025 emerged in the secondary market as well, with levels quoted at 99 7/8 bid, par 1/8 offered, according to a trader.

Pricing on the term loan is Libor plus 175 bps. The debt has 101 soft call protection for six months and lenders are receiving a 25 bps extension fee.

RBC Capital Markets is leading the deal that will be used to reprice from Libor plus 200 bps and extend by 2.5 years an existing term loan B. Citigroup is the administrative agent.

FLY is a Dublin-based aircraft lessor.

Upland Software revised

Back in the primary market, Upland Software raised its fungible incremental covenant-lite first-lien term loan (B2/B) due August 2026 to $190 million from $150 million and set the original issue discount at 98.5, the tight end of the 98 to 98.5 talk, according to a market source.

The incremental term loan is priced at Libor plus 375 bps with a 0% Libor floor, in line with existing term loan pricing, and the first-lien term loan debt is getting 101 soft call protection for six months.

Commitments were due at 5 p.m. ET on Tuesday, moved up from 5 p.m. ET on Thursday, the source said.

Credit Suisse Securities (USA) LLC is the left lead on the deal that will be used to repay revolver borrowings and for general corporate purposes, including acquisitions.

Upland Software is an Austin, Tex.-based service-as-a-solution (SaaS) provider of enterprise work management software.

USI adjusts OID

USI tightened the original issue discount on its non-fungible $550 million seven-year incremental term loan B (B) to 99.5 from 99, a market source remarked.

Pricing on the incremental term loan is still Libor plus 400 bps with a 0% Libor floor, and the debt still has 101 soft call protection for six months.

BofA Securities, Inc., KKR Capital Markets, Barclays, Citigroup Global Markets Inc., Macquarie Capital (USA) Inc. and Morgan Stanley Senior Funding Inc. are leading the deal that will be used to repay revolver borrowings and preferred stock.

USI is a Valhalla, N.Y.-based insurance brokerage and consulting firm.

Hyperion readies deal

Hyperion Insurance Group set a lender call for 11 a.m. ET on Wednesday to launch a $100 million incremental senior secured term loan B, and an amendment to its existing £125 million revolver, $1,181,441,689 term loan B and €245,748,120 term loan B, a market source said.

Morgan Stanley Senior Funding Inc. is the left lead on the deal.

The incremental term loan will be used to fund the Locked Account and pay related fees and expenses.

Hyperion is a London-based insurance intermediary group.

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