Moody’s gives Cengage loan Ba3, notes Caa1

Moody's Investors Service said it assigned Cengage Learning, Inc. a B2 corporate family rating and a B2-PD probability of default rating to incorporate proposed loan and unsecured notes capital structure.

The proposed $1.59 billion senior secured term loan is rated Ba3 (LGD-3) and the $740 million senior unsecured notes are rated Caa1 (LGD-5).

The company will use proceeds from the transaction to retire an existing $2.01 billion senior secured term loan and pay a special dividend to the shareholders of $283 million.

The outlook is stable.

Cengage Learning was previously an operating subsidiary of Cengage Learning Acquisitions, Inc. (B2, stable) holding the business assets, and is the surviving entity of the merger of Cengage Learning, Inc. and Cengage Learning Acquisitions, Inc.

Moody's will withdraw all ratings for Cengage Learning Acquisitions, Inc. upon closing of the transaction.

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