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Moody's to review Riverdeep's rating

23.02.07

Education publisher Riverdeep's debt rating has been put under review for possible downgrade by Moody's, the credit rating agency, after news that the publisher's auditor has resigned.

Ernst & Young wrote to Riverdeep on 31st January to resign as auditors of Riverdeep Group Ltd. It wrote that the "professional relationship between us and the company has irretrievably broken down". The issue arose over the treatment of a contract with a "long-standing customer" of the company, according to Reuters.

Moody's said that it might cut the B1 rating on the group's £828m senior bank debt and withdraw its B1 rating on a $250m loan--used to partially refinance the bridge facility put in place at the time of the Houghton Mifflin acquisition. The ratings agency said it expected to complete its rating review once it had received audited financial statements, by 31st March.

Riverdeep last year agreed to buy Boston-based textbook publisher Houghton Mifflin for US dollars 1.75 billion, and is still working to complete the deal. A source familiar with the matter told Reuters last week the company was also looking at bidding for the education arm of Reed Elsevier.

Reuters

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