Houghton Mifflin Harcourt Announces Pricing and Allocation of New Senior Secured Term Loans and ABL Revolving Credit Facility

Boston — Learning company Houghton Mifflin Harcourt (“HMH” or the “Company”) (Nasdaq: HMHC) announced today that it has priced and allocated $380 million aggregate principal amount of five-year senior secured term loans and a $250 million five-year senior secured asset-based revolving credit facility.  The revolving credit facility is subject to earlier maturity if the senior secured term loans have not been refinanced in full 91 days prior to such maturity date. The new senior secured term loans will be sold to investors at a price of 96% of the principal amount and will bear interest at a rate of LIBOR plus 6.25%. The closing of these loan transactions is expected to occur on November 22, 2019, subject to customary closing conditions.  

“The Company’s recent capital markets activities will enable us to have an improved balance sheet and a significantly extended maturity profile,” said Jack Lynch, President and CEO of Houghton Mifflin Harcourt. “After the closing of the financing, HMH will have a lower gross debt level – an important first step in de-levering our balance sheet.  The prepayment terms in this new capital structure will provide us the strategic flexibility to invest in growth, execute our strategy and generate greater free cash flow at all points in our business cycle.”

The Company intends to use the proceeds of the senior secured term loans, together with the net proceeds from the issuance of senior secured notes separately announced today and cash on hand of approximately $114 million, to repay approximately $766 million in borrowings under its existing term loan facility and pay fees and expenses related to the refinancing transactions.

About Houghton Mifflin Harcourt
Houghton Mifflin Harcourt (Nasdaq: HMHC) is a learning company committed to delivering integrated solutions that engage learners, empower educators and improve student outcomes. As a leading provider of K–12 core curriculum, supplemental and intervention solutions and professional learning services, HMH partners with educators and school districts to uncover solutions that unlock students’ potential and extend teachers’ capabilities. HMH serves more than 50 million students and three million educators in 150 countries, while its award-winning children’s books, novels, non-fiction, and reference titles are enjoyed by readers throughout the world.


Investor Relations
Brian S. Shipman, CFA
SVP, Investor Relations

Media Relations
Bianca Olson
SVP, Corporate Affairs

Forward-Looking Statements
The statements contained herein include forward-looking statements, which involve risks and uncertainties. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms “believes,” “estimates,” “projects,” “anticipates,” “expects,” “could,” “intends,” “may,” “will,” “should,” “forecast,” “intend,” “plan,” “potential,” “project,” “target” or, in each case, their negative, or other variations or comparable terminology. Forward-looking statements include all statements that are not statements of historical facts. They include statements regarding our intentions, beliefs or current expectations concerning, among other things, the size, terms, timing, completion and use of proceeds of the senior secured term loans, the asset-based revolving credit facility and the other refinancing transactions.  By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future.  These risks and uncertainties include, but are not limited to, our ability to consummate the loan transactions; consummate the other refinancing transactions; market conditions relating to the issuance of debt; and other factors discussed in the “Risk Factors” section of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other news releases we issue and filings we make with the SEC. We undertake no obligation, and do not expect, to publicly update or publicly revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.