By Paul A. Harris
St. Louis, Feb. 2 - Reader's Digest Association, Inc. priced a $525 million issue of three-month Libor plus 650 basis points seven-year floating-rate senior secured notes (B1/B/) at 97.00, with a 3% Libor floor, on Tuesday, according to an informed source.
The notes were priced on top of price talk.
J.P. Morgan Securities Inc., Bank of America Merrill Lynch and Credit Suisse Securities were joint bookrunners.
Proceeds will be used to refinance debt.
The proceeds, together with an additional amount sufficient to pay the redemption price of the notes, plus accrued and unpaid interest to, but excluding March 2, 2010, will be funded into an escrow account until certain escrow release conditions are fulfilled. If the escrow release conditions are not fulfilled on or prior to Feb. 28, 2010, the notes will be redeemed at par plus accrued and unpaid interest.
The issuer is a Pleasantville, N.Y., publishing and direct marketing company.
| Issuer: | The Reader's Digest Association, Inc.
|
| Face amount: | $525 million
|
| Proceeds: | $509.25 million
|
| Maturity: | Feb. 15, 2017
|
| Securities: | Floating-rate senior secured notes
|
| Bookrunners: | J.P. Morgan Securities Inc., Bank of America Merrill Lynch, Credit Suisse Securities
|
| Co-manager: | Moelis & Co.
|
| Coupon: | Three-month Libor plus 650 bps
|
| Price: | 97.00
|
| Libor floor: | 3%
|
| Call features: | Make-whole call at Treasuries plus 50 bps until Feb. 15, 2013, then callable at 104, 103, 102, par on and after Feb. 15, 2016
|
| Equity clawback: | 35% at the then applicable interest rate until Feb. 15, 2013
|
| Change-of-control put: | 101%
|
| Trade date: | Feb. 2
|
| Settlement date: | Feb. 11
|
| Ratings: | Moody's: B1
|
| Standard & Poor's: B
|
| Distribution: | Rule 144A/Regulation S with registration rights
|
| Price talk: | Three-month Libor plus 650 bps area at 97 (3% Libor floor)
|
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