7 Jan, 2021

McGraw Hill extends bank maturities, issues new debt

Mcgraw Hill LLC announced on Jan. 6 that it has closed previously announced transactions in which the company extended the maturities of most of its revolving credit facility and first-lien term loans, and issued $686.7 million in new junior-priority senior secured debt. The transactions were embodied in a transaction support agreement in December that was supported by holders of the first-lien term loans, the 7.875% senior unsecured notes due 2024, and holders of loans under MHGE Parent LLC's term loan agreement, known as the holdco loan.

In the debt maturity-extension transactions, the maturity of $260 million of McGraw-Hill's revolving credit facility was extended from May 2021, to November 2023, and its interest rate increased from L+400, to a range of L+425-475 (beginning at L+475), depending on net first-lien leverage ratio. Also, $65 million of the existing revolver commitment was terminated, and $25 million of the original commitment remains outstanding.

The maturity of $1.37 billion of the company's first-lien term loan was extended from May 2022, to November 2024, and its interest rate increased from L+400, to L+475, with a 1% LIBOR floor. The company repaid $196 million of the original term loan, while $27 million remains outstanding.

McGraw-Hill, along with McGraw-Hill Global Education Finance, Inc., also issued $686.7 million of new 8% junior-priority senior secured notes due November 2024. The notes were used to raise $329.5 million in cash, exchange for $346.1 million of the company's outstanding 7.875% senior unsecured notes, and exchange for $11.1 million of the holdco loan. After the transactions, $53.9 million of the senior unsecured notes remain outstanding.

The company said it repaid $179.5 million of the holdco loan in cash using $50 million from its balance sheet and the remainder from proceeds of the new junior-priority note issuance.

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