McGraw Hill Inc. announced a $50 million prepayment of principal on its term‑loan facility, bringing the company’s year‑to‑date principal reductions to $592 million after a $150 million payment in October. The prepayment was made on December 10, 2025, and follows the company’s ongoing deleveraging program that has already lowered net leverage to a reported 3.3× and generated more than $40 million in annualized interest savings.
The $50 million prepayment is part of McGraw Hill’s disciplined approach to reducing debt and aligning its capital structure with a target net‑leverage range of 2.0–2.5×. By cutting principal, the company is expected to lower future interest expense, improve cash‑flow generation, and provide a buffer for strategic investments in its digital learning portfolio.
Liquidity has been bolstered by the prepayment. McGraw Hill reported $463 million in cash and $913 million in total liquidity as of the end of the quarter. The liquidity figure includes cash, short‑term investments, and other liquid assets that can be deployed to fund growth initiatives or absorb market volatility.
The company’s higher‑education segment continues to drive growth, with double‑digit revenue gains that offset a modest decline in the K‑12 market. The prepayment strengthens the balance sheet, giving McGraw Hill greater flexibility to invest in AI‑powered learning tools and expand its digital footprint, which management views as a key driver of future profitability.
Bob Sallmann, CFO, said the prepayment “reinforces our commitment to the 2.0–2.5× net‑leverage target and demonstrates the strength and predictability of our business.” Simon Allen, CEO, added that the company’s “deep understanding of learning methodologies and data‑driven insights” positions it to capitalize on the growing demand for personalized digital education.
S&P Global Ratings upgraded McGraw Hill’s credit rating to B+ with a positive outlook, citing the company’s debt‑reduction progress and improved liquidity as evidence of a stronger financial profile. The upgrade signals confidence in McGraw Hill’s ability to sustain its deleveraging momentum while pursuing growth in high‑margin digital solutions.
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