Moody’s rates Houghton Mifflin Harcourt loan B3, view to stable

Moody's Investors Service said it assigned a B3 rating to Houghton Mifflin Harcourt Publishers Inc.’s proposed $330 million senior secured term loan, which will be used to help refinance an existing term loan due in 2021.

The agency also said it upgraded the corporate family rating to B3 from Caa1, and its probability of default rating to B3-PD from Caa1-PD on strong performance in its adoption markets during 2019, expectations of strong performance in 2020 and pending refinancing of its capital structure with maturity extensions.

“We anticipate that total gross debt outstanding will be approximately $680 million, a reduction of $86 million compared to 3Q 2019 balance. The pending reduction of debt also supports the rating action,” said Moody’s in a press release.

The agency also upgraded the speculative liquidity rating to SGL-2 from SGL-3.

Moody’s revised the outlook to stable from negative.

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