McGraw Hill refinances $1.3 billion in debt, pushing its next bond maturity to 2033

McGraw Hill, Inc., the Columbus, Ohio-based publisher of K-12 and college textbooks, said it has completed a refinancing of roughly $1.3 billion in debt, selling new secured notes and closing a larger term loan to retire obligations left over from its years as a leveraged buyout and to push its nearest major debt maturities out to 2031 and 2033.

The company disclosed the completed transactions in a securities filing dated October 9, 2026, and in a same-day statement posted to its investor relations site. The moves cap a two-week process that began when the company first floated the plan to bondholders in late September.

The numbers

McGraw-Hill Education, Inc., the operating subsidiary that borrows on the parent company's behalf, priced $400 million of new senior secured notes carrying an 8.000% coupon and maturing in 2033, smaller than the $500 million it had originally marketed. Alongside the bond sale, the company closed a $930 million senior secured term loan maturing in October 2033, which carries a floating rate of either the Secured Overnight Financing Rate plus 2.75% or a base rate plus 1.75%, and is repayable in quarterly installments of roughly $2.3 million.

Proceeds from both the notes and the term loan were used to redeem, in full, the company's outstanding 5.750% secured notes due 2028, which had roughly $828.5 million in principal outstanding as of midyear, according to its most recent quarterly report, and to refinance an existing term loan that carried about $551.5 million in principal at a 6.394% rate. Separately, the company's revolving credit facility was enlarged to $150 million from $111 million and its maturity, along with that of a separate asset-based lending facility, was pushed out to October 2031. The company noted that it had also made a separate $50 million voluntary prepayment on its prior term loan on October 1, days before the larger refinancing closed.

How the company got here

McGraw Hill's balance sheet still carries the imprint of two changes of ownership. Apollo Global Management took the educational publishing business private in 2012, and Platinum Equity bought it from Apollo in 2021 for roughly $4.7 billion, a transaction financed heavily with debt, including the 2028 notes now being retired. The company returned to public markets in July 2025, pricing shares at $17 apiece, below its marketed range, in an offering described in the prospectus for that listing. Platinum Equity retained roughly 86.5% of the voting power after the sale, leaving McGraw Hill a "controlled company" under New York Stock Exchange rules even as its shares, under the ticker MH, trade publicly.

Since the IPO, the company has used free cash flow to chip away at its debt load rather than return capital to shareholders, a pattern that rating agencies have rewarded twice this year. Moody's Ratings lifted McGraw Hill's corporate family rating to B1 from B2 in July, and S&P Global Ratings followed in September with an upgrade to BB- from B+, a move the agency attributed largely to the pace of debt paydown. Those upgrades, in turn, gave the company room to refinance on better terms even though the new notes carry a materially higher coupon, 8.000%, than the 5.750% notes they replace, reflecting the broader rise in borrowing costs since the 2028 notes were sold in 2021.

Who is affected

The immediate parties are McGraw Hill's lenders and bondholders. Holders of the 5.750% notes due 2028 are being cashed out at par under the terms of the redemption, while a new group of investors now holds the 2033 notes at a higher yield. Bank of America, N.A. serves as administrative agent on the amended and restated credit facilities, and the Bank of New York Mellon Trust Company is trustee on the new notes.

For shareholders, including Platinum Equity as the controlling holder and the minority investors who bought in at the 2025 IPO, the practical effect is a longer runway before the company faces a maturity wall, plus incremental room to repurchase shares: the company noted that, once the redemption is complete, it will be permitted to make unlimited restricted payments, including buybacks, as long as its leverage ratio stays within covenant limits. The company's roughly 30 offices and the schools, colleges and professional customers that use its K-12, higher-education and workforce-training content are not directly touched by the financing itself, though the reduced interest burden frees up cash that management has said it intends to keep directing toward debt reduction rather than new acquisitions in the near term.

Reaction

"We continue to reduce gross debt while we proactively extended our maturity wall, optimizing market conditions and recent rating agency upgrades, marking another step in our efforts to strengthen our capital structure over time," said Bob Sallmann, McGraw Hill's chief financial officer, in the company's statement. "These transactions offer us the ability to continue to reduce our gross debt over time, as we remain firmly committed to our net debt to Adjusted EBITDA leverage ratio target of 2.0-2.5x."

Trade coverage of the deal largely echoed that framing. One financial news outlet's summary of the filing noted that the new term loan, at $930 million, came in larger than the $830 million McGraw Hill had outlined when it first announced the plan on September 25, while the bond portion shrank to $400 million from the $500 million originally marketed, a sign, however small, of how investors priced the two tranches relative to each other once the deal was in the market.

What happens next

McGraw Hill ended its last full fiscal year, which closed March 31, 2026, with revenue of $2,102.8 million and a net leverage ratio of 3.2 times adjusted EBITDA, according to its year-end earnings release, still above the 2.0-to-2.5-times target that Sallmann and other executives have repeated across successive quarters even as the company says it has cut gross debt by $646 million since the 2025 IPO. For the current fiscal year, management has guided to revenue of $2.115 billion to $2.175 billion and adjusted EBITDA of $750 million to $790 million. With the 2028 notes retired and its revolving facilities extended to 2031, the company's next scheduled bond or loan maturity does not arrive until 2033, giving the management team under chief executive Philip Moyer, who succeeded longtime CEO Simon Allen in February, several years to keep working the leverage ratio down before it has to return to credit markets again.