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Houghton Mifflin Harcourt wins interim access to $400 million DIP
By Jim Witters
Wilmington, Del., May 22 - Houghton Mifflin Harcourt Publishing Co. was granted interim access to $400 million of a $500 million debtor-in-possession financing facility, according to documents filed Tuesday with the U.S. Bankruptcy Court for the Southern District of New York.
The company received interim access to $250 million of the asset-backed revolving credit agreement portion of the loan and $150 million of the term loan portion.
The financing is a DIP agreement that will converted to exit financing under the terms of the pre-packaged bankruptcy the company filed May 21 with the support of its pre-petition lenders.
A hearing on the final DIP order is scheduled for 9:45 a.m. ET on June 21.
DIP terms
The financing is through Citigroup Global Markets Inc. Citigroup affiliate Citibank, NA is the administrative agent.
Upon final approval of the DIP facility, an additional $100 million will be available under the term loan.
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 five years from the plan effective date and the exit term loan six years from the effective date.
The exit facility will have a letter-of-credit subfacility of $40 million that may be used to replace, roll over or backstop outstanding letters of credit, court documents state.
The exit facility also will include a $20 million discretionary swingline loan subfacility.
The interest rate on the DIP facility revolver will be Libor plus 325 basis points. Interest on the revolver after the exit facility conversion will be based on availability.
The interest rate on the DIP facility term loan will be Libor plus 625 bps.
Houghton Mifflin, a Boston-based educational publisher in the K-12 market, filed for bankruptcy on May 21. The Chapter 11 case number is 12-12171.
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