Reader's Digest tenders for 6½% notes due 2011

By Jennifer Chiou

New York, Jan. 25 - The Reader's Digest Association announced the launch of a cash tender offer for any and all of its $300 million of 6½% senior notes due 2011.

The company is also soliciting consents to eliminate substantially all of the restrictive covenants as well as certain events of default in the note indenture.

For each $1,000 principal amount, the company said it will pay an amount determined using the 4.625% Treasury due Feb. 29, 2008 and 50 basis points.

Reader's Digest said that those who tender by 5 p.m. ET on Feb. 7 will receive the $30.00 consent payment, which is included in the payout.

The company added that it will pay accrued interest to the purchase date.

The offer ends at 8 a.m. ET on Feb. 23.

The offer is conditioned on, among other things, the acquisition of the company by an investor group led by Ripplewood Holdings LLC, sufficient financing and consents from a majority of noteholders.

J.P. Morgan Securities Inc. (call collect 212 270-3994) and Merrill Lynch, Pierce, Fenner & Smith Inc. (888 654-8637 or call collect 212 449-4914) are the dealer managers. Global Bondholder Services Corp. is the information agent (866 470-4300 or call collect 212 430-3774).

Reader's Digest is a Pleasantville, N.Y., publisher and direct marketing company that creates and delivers products and content for magazines, books, recorded music collections, home videos and web sites.

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