S&P lowers Reader's Digest senior secured

Standard & Poor's said it lowered its issue-level rating on Reader's Digest Association Inc.'s

senior secured debt to B-, at the same level as the B- corporate credit rating on the company, from B.

The recovery rating on this debt was revised to 4 from 2, the agency said, noting that the issue-level rating on Reader's Digest's subordinated debt remains at CCC with a recovery rating of 6.

According to S&P, the revision of the recovery rating on the company's secured debt reflects a change in its valuation approach and it now believes that the company would be sold as part of an orderly liquidation following a default, versus our previous assumption that the company would reorganize.

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