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Cengage Learning says amend-to-extend loan deal en route

Cengage Learning term debt is quoted on either side of 93 as word circulated that the higher-education publisher said it would shortly roll out an amend-to-extend transaction. The news, which had been expected, came during a presentation this morning at J.P. Morgan’s high yield and leveraged finance conference, sources said.

Investors were hearing last week that the issuer might be seeking a short-term extension of the loans given the pressing maturity of its junior debt. Roughly $1.215 billion of 10.5% senior notes, $233.6 million of 13.25% senior subordinated discount notes and $127 million of 13.75% senior PIK notes all mature in 2015.

The Cengage TLB dates back to June 2007, when a Royal Bank of Scotland-led arranger group syndicated a $3.44 billion term loan and a $300 million revolving credit to finance the leveraged buyout of the higher-education publisher by Apax Partners and OMERS Capital Partners. There was $3.293.8 billion outstanding under the L+225 term loan at Dec. 31.

Cengage, formerly Thomson Learning, in June 2008 completed a $625 million incremental term loan, which cleared at L+375, with a 3.75% LIBOR floor and 102, 101 call premiums in years one and two, respectively. Proceeds backed the company’s $750 million acquisition of Houghton Mifflin’s College Division. The incremental term loan currently stands at $603 million. Corporate ratings are B/B3. – Staff reports

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