Cengage Learning, Inc.: Update to credit analysis - Moody's Global Credit Research

Cengage Learning, Inc.: Update to credit analysis

Cengage Learning, Inc.: Update to credit analysis - Moody's Global Credit Research
Cengage Learning, Inc.: Update to credit analysis
Published Feb 28, 2019
10 pages (5498 words) — Published Feb 28, 2019
Price US$ 250.00  |  Buy this Report Now

About This Report

  
Brief Excerpt:

...Cengage credit profile reflects Moody's expectation for low single digit percentage declines in enrollment levels for U.S. institutions of higher education, increased competition among leading players as well as rental and used markets, and increased competitive risk arising from open educational resources. Cengage has successfully launched its Cengage Unlimited courseware subscription product and we anticipate that the company will be able to gain additional market share in courseware adoption, as well as greater student participation in using its learning products within each particular course. While leverage is high, increased market share is anticipated to increase revenue over the next 12 months, and accompanied by planned cost reductions, will likely result in reduction to leverage. We expect the newly entered rental and subscription based distribution channels may result in a stronger protection of student spend market share for traditional publishers, though it may take some time...

  
Report Type:

Credit Opinion

Company:
Issuer
Cengage Learning, Inc.
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Moody's downgrades Cengage's CFR to Caa2; outlook negative - Rating Action – 2020/08/17 – US$ 180.00 – ...ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK. All information contained herein is obtained by MOODY'S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided "AS IS" without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY'S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing its Publications. To the extent permitted by law, MOODY'S and its directors, officers,...

Cengage Learning, Inc.: Termination of McGraw-Hill and Cengage Merger Agreement has no immediate impact on the companies credit ratings - Issuer Comment – 2020/05/06 – US$ 200.00 – ...Cengage Learning Holdings II, Inc. ("Cengage") and McGraw-Hill Education, Inc. ("McGraw- Hill") terminated their previously announced merger agreement on May 3rd, 2020, following prolonged regulatory review of the competitive implications of the merger by various regulatory entities globally. Meaningful divestitures would have been required by the U.S. Department of Justice if the merger were to be approved by the regulator. Under the terms of the merger agreement, neither Cengage nor McGraw-Hill will be responsible for any payments to the other party as a result of the termination of the merger agreement. The termination of the merger agreement has no immediate impact to the companies' credit ratings. While the merger would have likely created substantial synergies across the portfolios of two publishers, with meaningful benefits in the higher education segment, each publisher has continued to operate independently during the merger review process and operating expenses were managed and...

Cengage Learning, Inc.: Update to credit analysis - Credit Opinion – 2020/02/28 – US$ 250.00 – ...Cengage credit profile reflects Moody's expectation for low to mid single digit percentage declines in enrollment levels for U.S. institutions of higher education, increased competition among leading players as well as rental and used markets, and increased competitive risk arising from open educational resources. Cengage has successfully launched its Cengage Unlimited courseware subscription product and gained 1.6% in market share in higher education year over year as a result of increased sales of Cengage Unlimited. However, revenue continued to decline as a result of sustained weakness in print sales and reduced revenue from courseware (which may partly have been substituted by Cengage Unlimited). The company successfully managed its cost base, resulting in flat leverage year over year. We expect leverage to remain high near 8.5x over the next 12 months. Secular weakness in higher education revenue will partially offset by tight cost controls and market share gains from higher sell through...

Moody's assigns B3 CFR to McGraw-Hill Education Holdings, LLC following its announced merger with Cengage Learning, Inc. - Rating Action – 2019/05/01 – US$ 180.00 – ...MOODY'S CREDIT RATINGS AND MOODY'S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY'S CREDIT RATINGS OR MOODY'S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT. CREDIT RATINGS AND MOODY'S PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK. All information contained...

Cengage Learning, Inc.: Update to credit analysis - Credit Opinion – 2018/02/28 – US$ 250.00 – ...Cengage rating reflects Moody's expectation for low single digit percentage declines in enrollment levels for U.S. institutions of higher education, increased competition among leading players as well as rental and used markets, and increased competitive risk arising from open educational resources. We expect the newly entered rental and subscription based distribution channels may result in a stronger protection of student spend market share for traditional publishers, though it may take some time to see the results, while initial revenue pressure will increase. Ratings reflect the company's high leverage of 7.0x debt-to- cash EBITDA (including Moody's standard adjustments and cash pre-publication costs as an expense) for LTM ending December 31, 2017 and weak free cash flow to debt of low single digits. We expect leverage to remain at or 7x over the next 12-18 months, as participation in the rental and subscription distribution channels combined with digital growth of publisher's software...

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Moody's Global Credit Research—Moody's Investors Service, a leading global credit rating, research and risk analysis firm, publishes credit opinions, research, and ratings on fixed-income securities, issuers of securities and other credit obligations. Credit ratings and research help investors analyze the credit risks associated with fixed-income securities. Ratings also create efficiencies in fixed-income markets and similar obligations, such as insurance and derivatives, by providing reliable, credible, and independent assessments of credit risk. For issuers, Moody's services increase market liquidity and may reduce transaction costs.

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MLA:
Moody's Global Credit Research. "Cengage Learning, Inc.: Update to credit analysis" Feb 28, 2019. Alacra Store. Jul 23, 2024. <http://www.alacrastore.com/moodys-credit-research/Cengage-Learning-Inc-Update-to-credit-analysis-PBC_1161108>
  
APA:
Moody's Global Credit Research. (). Cengage Learning, Inc.: Update to credit analysis Feb 28, 2019. New York, NY: Alacra Store. Retrieved Jul 23, 2024 from <http://www.alacrastore.com/moodys-credit-research/Cengage-Learning-Inc-Update-to-credit-analysis-PBC_1161108>
  
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