McGraw-Hill Global Education Holdings, LLC — Moody’s downgrades McGraw Hill CFR to Caa2; outlook negative

New York, August 17, 2020 — Moody’s Investors Service, (“Moody’s”) downgraded McGraw Hill LLC’s (“McGraw”) ratings, including its Corporate Family Rating (CFR) to Caa2 from B3 and changed the outlook to negative from stable.

The downgrades and the change in outlook to negative reflect Moody’s view that the company’s operating challenges stemming from the continued secular pressure in the higher education market will be further exacerbated by the significant uncertainty around enrollment levels amid the coronavirus pandemic. Moody’s believes that the earnings deterioration will make it difficult for the company to materially reduce its high leverage and address its significant $2.1 billion of 2021/2022 maturities (including revolver), thereby elevating default risk. Given near-term maturities, the expectation of high leverage, and negative pressure on earnings, sustainability of the capital structure has become a greater concern, including the likelihood of a distressed debt exchange.

The company’s $350 million revolver (undrawn as of … Read More