Scholastic Corporation Enters into Third Amendment to Credit Agreement

Scholastic Corporation (NASDAQ:SCHL) announced on November 26, 2024, that the company, along with its principal operating subsidiary Scholastic Inc., collectively referred to as the Borrowers, have entered into a Third Amendment to Amended and Restated Credit Agreement. This Amendment was made with a syndicate of banks, along with Bank of America, N.A. acting as the administrative agent, and Truist Bank and Wells Fargo Bank, National Association, as co-syndication agents.

The key point of the Amendment revolves around a $400.0 million unsecured revolving credit facility that enables the Borrowers to borrow, repay, or prepay and reborrow until the maturity date on November 26, 2029. This Amendment provides flexibility in allowing dividend payments or other distributions in common stock of the Corporation. It also permits cash dividends and share repurchases within certain limits as long as the pro forma Consolidated Net Leverage Ratio does not exceed 2.75:1.

Scholastic Corporation’s Credit Agreement outlines that interest on Base Rate Advances and Term SOFR Advances is due and payable according to specific schedules. The interest pricing structure under the Credit Agreement is based on either a Base Rate Advance or a Term SOFR Advance, each having its rate and margin determined by the Borrowers’ Consolidated Net Leverage Ratio.

The Amendment beneficially removed a credit spread adjustment applicable to Term SOFR loans, enhancing the terms for the Borrowers. Moreover, a commitment fee concerning the unused amount of revolving credit commitments and provisions for letters of credit and swingline loans were detailed in the agreement. The Credit Agreement also includes an accordion feature allowing for an increase of up to an additional $150.0 million under certain conditions.

To ensure financial stability, the Credit Agreement sets out financial covenants related to leverage and interest coverage ratios, limitations on dividends and distributions, and other restrictions on fundamental changes to the Borrowers or their operations.

At this time, Scholastic Corporation has not provided any additional financial statements or exhibits beyond the Third Amendment to the Credit Agreement.

The company’s Chief Financial Officer, Haji L. Glover, signed the report on December 3, 2024.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read Scholastic’s 8K filing here.

About Scholastic

Scholastic Corporation publishes and distributes children’s books worldwide. It operates in three segments: Children’s Book Publishing and Distribution, Education Solutions, and International. The Children’s Book Publishing and Distribution segment engages in publication and distribution of children’s print, digital, and audio books, as well as media and interactive products through its school reading events and trade channel; and operation of school-based book clubs and book fairs in the United States.