Houghton Mifflin starts roadshow for $350 million secured notes; initial talk 8¼%-8½%

By Paul A. Harris

Portland, Ore., Nov. 12 – Houghton Mifflin Harcourt Publishers Inc. started a roadshow on Tuesday for a $350 million offering of 5.25-year senior secured notes (current ratings B3/B), according to market sources.

Initial talk has the notes coming to yield 8¼% to 8½%, a New York-based trader said.

The roadshow travels to New York on Wednesday and to Boston on Thursday, and the Rule 144A for life and Regulation S offering is expected to price on Friday.

Morgan Stanley & Co. LLC, Citigroup Global Markets Inc., BofA Securities Inc. and Wells Fargo Securities LLC are the joint bookrunners. Citizens Bank is the co-manager.

The notes become callable after 2.25 years at par plus 50% of coupon.

The Boston-based publisher of education material and provider of related services plans to use the proceeds, together with a new term loan and cash on hand, to refinance its existing term loan B.

The co-issuers are Houghton Mifflin Harcourt Publishing Co. and HMN Publishers LLC.

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