Media company offers 300bp step-up for covenant waiver

Education Media & Publishing (EMPG), a school textbook publisher, has offered a 25 basis point fee to lenders and a 300bp increase in its interest rate in exchange for a covenant waiver, reports the Financial Times. Holders of the company's $4.3 billion of first-lien loans, including Apollo, Blackrock and Guggenheim Partners, have been asked to relax a debt-to-ebitda limit of 8.75 times. The borrower is also renegotiating its $1.7 billion of second-lien loans and $800 million of holding company debt, according to the Financial Times. The company was formed in 2006 from the leveraged buy-out of Houghton Mifflin.