S&P gives RDA Holding B, lowers Reader's Digest

Standard & Poor's said it assigned its B corporate credit rating and negative outlook to RDA Holding Co., the company formed by private equity firm Ripplewood Holdings LLC to purchase Reader's Digest Association Inc.

At the same time, S&P said it lowered its ratings on Reader's Digest Association, including lowering the corporate credit rating to B from BB, reflecting the increase in financial risk resulting from the leveraged acquisition and removed the ratings from CreditWatch, where they were placed with negative implications on Aug. 15.

The outlook is negative.

The agency said it also assigned a B bank loan rating, at the same level as the corporate credit rating, with a recovery rating of 3, to the company's $1.46 billion first-lien senior secured credit facilities.

The facilities consist of a $300 million revolving credit facility due 2013 and a $1.16 billion term loan B due 2014, the agency said, noting that it also assigned its CCC+ bank loan rating to the company's $750 million senior subordinated notes due 2017.

According to S&P, the ratings reflect the company's heightened debt leverage, trend of lower profitability and its expectation of only modest discretionary cash generation and these factors are minimally offset by its market positions in the highly competitive publishing and direct marketing businesses.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.