Goldman Sachs, CIBC World Markets, and Deutsche Bank are launching retail syndication this month of Thomas H. Lee and Bain Capital's $725 million credit backing the $1.66 billion purchase of Boston-based Houghton-Mifflin from Vivendi Universal. The deal, which launched to managing agents last month, could face problems due to high leverage, bankers stated. However, other bankers said they were expecting the credit for the textbook publishing company to be met with a good reception. A Goldman official and a Deutsche Bank spokesman declined to comment, while a CIBC banker did not return calls.
The deal includes a $400 million "B" term loan priced at LIBOR plus 33/ 4% and a $325 million revolver with a LIBOR plus 31/ 4% spread. The banks have also put in place a $500 million bridge-to-bond piece to be taken out this month. Vivendi announced that the acquisition closed at the end of last month with an exchange of $1.28 billion in cash and the assumption of $380 million of Vivendi's debt. Officials at the buyout shops could not be reached by press time.