New Issue: Houghton Mifflin prices downsized $300 million eight-year notes at par to yield 10½%

By Paul A. Harris

Portland, Ore., May 13 - Houghton Mifflin Harcourt Publishers Inc. priced a massively downsized $300 million issue of eight-year senior secured first-lien notes (Caa1//B-) at par to yield 10½% on Friday, according to market sources.

The yield printed on top of the price talk.

J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC and Wells Fargo Securities were the joint bookrunners for the deal, which was downsized from $1.35 billion.

The Boston-based educational publisher plans to use the proceeds for general corporate purposes.

Issuer:	Houghton Mifflin Harcourt Publishers Inc.
Amount:	$300 million, decreased from $1.35 billion
Maturity:	June 1, 2019
Securities:	Senior secured first-lien notes
Bookrunners:	J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Wells Fargo Securities, LLC
Coupon:	10½%
Price:	Par
Yield:	10½%
Spread:	777 bps
Call features:	Make-whole call at Treasuries plus 50 bps until June 1, 2015, then callable at 105.25, 102.625, par on and after June 1, 2017
Equity clawback:	35% at 110.25 until June 1, 2014
Change-of-control put:	101%
Trade date:	May 13
Settlement date:	May 26
Ratings:	Moody's: Caa1
	Fitch: B-
Distribution:	Rule 144A and Regulation S for life
Price talk:	10½% area
Marketing:	Roadshow

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