Moody's may downgrade Reader's Digest

Moody's Investors Service said it placed The Reader's Digest Association, Inc.'s Ba1 corporate family rating and Ba2 senior unsecured note rating on review for possible downgrade.

The review is prompted by increasing debt to fund acquisitions and return of capital to shareholders, deterioration in cash generation and Moody's concern regarding the company's weakened liquidity position.

Moody's said it will evaluate the company's plans to stabilize and reverse the significant operating performance decline in the consumer business segment and to improve working capital management in support of new product introductions and the international expansion strategy.

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