S&P assigns B to Cengage loans

S&P said it assigned B issue-level and 2 recovery ratings to Cengage Learning Inc.'s planned $1.6 billion term loan B due 2031 and $200 million revolving credit facility due 2029. The 2 recovery rating indicates substantial (70%-90%; rounded estimate: 75%) recovery in default. Cengage Learning is a wholly owned subsidiary of Cengage Learning Holdings II Inc.

The company will use the new loan to refinance its $1.6 billion term loan due 2026, also rated B with a 2 recovery rating. The company also intends to replace its $182 million asset-based lending facility due 2027 with the new $200 million revolving credit facility due 2029.

“We view the proposed transaction as leverage neutral but anticipate it will improve Cengage's debt maturity profile,” S&P said in a press release.

The outlook is stable.

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