New Issue: Reader's Digest sells $300 million seven-year notes to yield 6½%

By Paul A. Harris

St. Louis, Feb. 27 - Reader's Digest Association Inc. sold $300 million of seven-year senior notes (Ba3/BB-) Friday at par to yield 6½%, according to a market source.

Price talk was 6½% to 6¾%.

JP Morgan ran the books on the Rule 144A issue.

Proceeds will be used to repay bank debt.

The issuer is a Pleasantville, N.Y.-based publisher of Reader's Digest magazine.

Issuer:	Reader's Digest Association Inc.
Amount:	$300 million
Maturity:	March 1, 2011
Security description:	Senior notes
Bookrunner:	JP Morgan
Coupon:	6½%
Price:	Par
Yield:	6½%
Spread:	304 basis points
Call features:	Callable after March 1, 2008 at 103.25, 101.625, par on March 1, 2010 and thereafter
Equity clawback:	Until March 1, 2007 for 35% at 106.50
Pricing date:	Feb. 27
Settlement date:	March 3
Ratings:	Moody's: Ba3
	Standard & Poor's: BB-
Price talk:	6½%-6¾%

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