Reader's Digest starts roadshow for $750 million 10-year senior subordinated notes

By Paul A. Harris

St. Louis, Feb. 16 - Reader's Digest Association, Inc. began a roadshow on Friday for a $750 million offering of 10-year senior subordinated notes (B3/CCC+), according to market sources.

The offering is expected to price on Feb. 26.

JP Morgan, Merrill Lynch & Co. Citigroup and RBC Greenwich Capital are joint bookrunners for the notes, which are being offered via Rule 144A with registration rights and Regulation S.

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 PIK 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, publisher 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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