Moody’s downgrades HMH
Credit rating agency Moody’s has “slashed” the rating of Houghton Mifflin Harcourt and gave it a “negative” outlook,” amid a belief that a fundamental debt restructuring is required at the company in order for it to survive,” according to a report by John Mulligan in the Irish Times. HMH is owned by Irish hedge fund Riverdeep, which is controlled by Barry O’Callaghan.
According to a statement from Moody’s, the downgrade “reflects our view that management’s cost-cutting initiatives may be insufficient to offset the impact of declining top line [revenue], and that a more comprehensive balance sheet overhaul may be required to address HMH’s unsustainable capital structure.”
The Times calls the move “a significant blow to Mr O’Callaghan” in his attempt to save the company after being unable to sell it. As recently reported by MobyLives, O’Callaghan took over the chief executive role at HMH just last month.