S&P cuts Reader's Digest

Standard & Poor's said it lowered its ratings on Reader's Digest Association Inc., including its corporate credit rating to B- from B.

The outlook has been revised to stable.

The agency said that the downgrade is based on the company's higher debt levels, slightly lower EBITDA and negative discretionary cash flow in the 12 months ended Dec. 31, as well as S&P's concerns regarding management's ability to stem business declines at its school and educational services operations, complete restructuring initiatives and resume profitability growth over the near term.

The agency added that debt levels increased $174 million or 9% since the March 2007 LBO partly due to significant nonrecurring payments, which were larger than it previously anticipated.

© 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.