Cengage Learning downsizes to $640 million, talks eight-year notes at 9% to 9¼%

By Paul A. Harris

Portland, Ore., May 26 – Cengage Learning, Inc. downsized its offering of eight-year senior notes (Caa1/CCC+) to $640 million from $740 million, according to a market source.

The Rule 144A for life deal, which is talked to yield 9% to 9¼%, is expected to price Thursday, the source added.

Morgan Stanley & Co. LLC, Credit Suisse Securities (USA) LLC, BMO Capital Markets Corp., Citigroup Global Markets Inc., Goldman Sachs & Co., Wells Fargo Securities LLC, Deutsche Bank Securities Inc. and KKR Capital Markets LLC are the joint bookrunners.

The notes become callable after three years at par plus 75% of the coupon.

The Boston-based educational content, technology and services company plans to use the proceeds to retire its existing term loan and pay a special dividend to the shareholders.

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