McGraw-Hill Global Education Announces Closing of Debt Refinancing and Reorganization

NEW YORK, May 4, 2016 - McGraw-Hill Global Education Intermediate Holdings, LLC (“MHGE Intermediate Holdings”) announced today that that two of its wholly owned subsidiaries, McGraw-Hill Global Education Holdings, LLC (“MHGE”) and McGraw-Hill Global Education Finance, Inc. (together with MHGE, the “Issuers”) have closed their offering of $400 million aggregate principal amount of 7.875% Senior Notes due 2024 (the “Notes”) in a private placement (the “Notes Issuance”).

Concurrently with the closing of the Notes Issuance, MHGE entered into $1,925 million of new senior secured credit facilities (the “New Senior Facilities”), consisting of a five-year $350 million senior secured revolving credit facility, which was undrawn at closing, and a six-year $1,575 million senior secured term loan credit facility.  The proceeds from the Notes Issuance and the New Senior Facilities were used to repay each of MHGE’s and McGraw-Hill School Education Intermediate Holdings, LLC’s (“MHSE”) existing credit facilities, to repurchase the Issuers’ 9.75% First-Priority Senior Secured Notes due 2021 (the “Secured Notes”) pursuant to the previously announced tender offer, to fund a cash distribution to MHGE’s ultimate equity holders and to pay certain related fees and expenses.  The remaining proceeds, together with cash on hand, will be used to repurchase or redeem the remaining Secured Notes.

Concurrently with the closing of the Notes Issuance and the entry into the New Senior Facilities, MHGE Intermediate Holdings completed a reorganization in which all equity interests in MHSE, which owns the K-12 business of MHGE Intermediate Holdings’ indirect parent, McGraw-Hill, Inc., were contributed to MHGE Intermediate Holdings, such that MHSE is a direct subsidiary of MHGE Intermediate Holdings.

The Notes were offered in a private offering that is exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), only to qualified institutional buyers in reliance on Rule 144A under the Securities Act and, outside the United States, to non-U.S. investors pursuant to Regulation S under the Securities Act. The Notes will not be registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent an effective registration statement or an applicable exemption from registration requirements or a transaction not subject to the registration requirements of the Securities Act or any state securities laws.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offering, solicitation or sale would be unlawful.