Reader's Digest $750 million 10-year notes expected to launch mid-February

By Paul A. Harris

St. Louis, Feb. 14 - Reader's Digest Association Inc. will likely launch a $750 million offering of 10-year senior subordinated notes (B3/CCC+) during the next week, sources told Prospect News.

JP Morgan, Citigroup, Merrill Lynch & Co. and RBC Greenwich Capital will lead the offering, which is being made via financing unit Doctor Acquisition Co.

Proceeds will be used to help fund the $2.4 billion acquisition of Reader's Digest by Ripplewood Holdings LLC, J. Rothschild Group, Golden Tree Asset Management, GSO Capital, Merrill Lynch and Magnetar Capital.

JP Morgan will also purchase $330 million of 12-year pay-in-kind preferred shares and $110 million of common stock of the holding company.

Ripplewood will combine Reader's Digest with two of its portfolio companies, WRC Media, publishers of "Weekly Reader," and Direct Holdings U.S. Corp.

Reader's Digest is a Pleasantville, N.Y., publisher and direct marketing company.

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