Houghton Mifflin gets approval for $500 million DIP financing facility

By Jim Witters

Wilmington, Del., June 21 - Houghton Mifflin Harcourt received final approval on June 21 for a $500 million debtor-in-possession financing facility through Citigroup Global Markets Inc., according to documents filed with the U.S. Bankruptcy Court for the Southern District of New York.

As previously reported, the DIP loan can be converted into exit financing.

Before the exit facility conversion date, the maturity date of the DIP facility will be the earlier of 18 months from the bankruptcy filing date and the effective date of a plan of reorganization.

The exit revolver will mature in five years from the plan effective date and the exit term loan in six years from the effective date.

Interest on the DIP facility revolver will be either Libor plus 325 basis points or Base rate plus 225 bps. Interest on the revolver after the exit facility conversion will be based on availability.

Interest on the DIP facility term loan will be Libor plus 625 bps or Base rate plus 525 bps.

The financing is part of Houghton Mifflin's prepackaged bankruptcy that garnered strong support from lenders, bondholders and shareholders. The company reached an agreement with more than 70% of its senior secured lenders and bondholders on the plan terms.

Houghton Mifflin, a Boston-based educational publisher in the K-12 market, filed for bankruptcy on May 21. Its Chapter 11 case number is 12-12171.

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