Reader's Digest begins asset sale tender offer for floating-rate notes

By Angela McDaniels

Tacoma, Wash., May 17 - Reader's Digest Association, Inc. began a tender offer for up to $60.66 million of its floating-rate senior secured notes due 2017, according to a company news release.

The company is offering 95% of par plus accrued interest.

The offer will expire at midnight ET on June 14.

The offer is being made as a result of the company's sale of its Allrecipes.com business and is being funded with cash received in connection with that sale.

Under the terms of the notes, the company is required to offer to buy back the maximum principal amount of notes that may be purchased using the excess collateral proceeds of the sale.

On May 11, the company announced that it had received enough consents to amend the indenture governing the notes to allow it to make the tender offer at 95% of par. Prior to the amendment, the company was required to make the offer at par.

The company sold Allrecipes.com to Meredith Corp. for net proceeds of $150 million. The sale closed on Feb. 29, and the company used $85 million of the proceeds to repay bank loan debt.

Reader's Digest is a media and direct marketing company based in New York.

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