Moody's ups Reader's Digest notes to Ba2

Moody's Investors Service said it confirmed the corporate ratings for The Reader's Digest Association, Inc. in connection with the company's closing of a new $400 million senior secured revolving credit facility and announcement that the board of directors approved a $100 million share repurchase authorization.

Moody's also upgraded Reader's Digest's $300 million 6½% senior unguaranteed notes due March 2011 to Ba2 from Ba3.

Moody's confirmed the company's Ba1 senior implied rating and Ba3 senior unsecured issuer rating.

The outlook was changed to stable from negative due to Moody's expectation for greater revenue stability and the belief that the company will continue to generate free cash flow and reduce debt.

The ratings reflect the company's high leverage, weakening revenue base, high sales return and bad debt experience and adequate liquidity, according to Moody's.

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