By Paul A. Harris
Portland, Ore., Nov. 19 – Houghton Mifflin Harcourt Publishers Inc. priced a downsized $306 million issue of 9% 5.25-year senior secured notes (B3/B/BB-) at 98 to yield 9½% on Tuesday, according to market sources.
The issue size was decreased from $350 million with the shift of $50 million of proceeds to the concurrent term loan B.
The coupon and price came on top of revised talk. The yield printed in line with revised talk. Earlier talk was 8½% to 8¾%. Initial talk was 8¼% to 8½%.
Morgan Stanley & Co. LLC, Citigroup Global Markets Inc., BofA Securities Inc. and Wells Fargo Securities LLC were the joint bookrunners.
The Boston-based publisher of education materials and provider of related services plans to use the proceeds, together with the new term loan and cash on hand, to refinance its existing term loan B.
The above-mentioned shift of proceeds to the term loan from the bonds increases the loan size to $380 million from $330 million.
| Issuers: | Houghton Mifflin Harcourt Publishers Inc., Houghton Mifflin Harcourt Publishing Co., HMH Publishers LLC
|
| Face amount: | $306 million, decreased from $350 million
|
| Proceeds: | $299.88 million
|
| Maturity: | Feb. 15, 2025
|
| Securities: | Senior secured notes
|
| Bookrunners: | Morgan Stanley & Co. LLC, Citigroup Global Markets Inc., BofA Securities Inc. and Wells Fargo Securities LLC
|
| Co-manager: | Citizens Capital Markets Inc.
|
| Coupon: | 9%
|
| Price: | 98
|
| Yield: | 9½%
|
| Spread: | 785.7 bps
|
| First call: | Make-whole call at Treasuries plus 50 bps until Feb. 15, 2022, then callable at 104.5
|
| Equity clawback: | 40% at 109 until Feb. 15, 2022
|
| Trade date: | Nov. 19
|
| Settlement date: | Nov. 22
|
| Ratings: | Moody's: B3
|
| S&P: B
|
| Fitch: BB-
|
| Distribution: | Rule 144A for life and Regulation S
|
| Price talk: | 9% coupon at 98 to yield approximately 9½%, revised from 8½% to 8¾%
|
| Marketing: | Roadshow
|
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