Reader's Digest buys back $60.6 million of floaters in tender offer

By Angela McDaniels

Tacoma, Wash., May 18 - Reader's Digest Association, Inc. received tenders for about $509 million of its floating-rate senior secured notes due 2017, according to an 8-K filing with the Securities and Exchange Commission.

As previously reported, the company began a tender offer for up to $60.66 million of the notes on May 17. The offer expired at midnight ET on June 14.

On June 15, Reader's Digest accepted for purchase $60,596,000 principal amount of the notes on a pro rata basis.

Holders received 95% of par plus accrued interest. The total cost was $58.06 million including accrued interest.

The offer was made as a result of the company's sale of its Allrecipes.com business and was funded with cash received in connection with that sale.

Under the terms of the notes, the company is required to offer to buy back the maximum principal amount of notes that may be purchased using the excess collateral proceeds of the sale.

On May 11, the company announced that it had received enough consents to amend the indenture governing the notes to allow it to make the tender offer at 95% of par. Prior to the amendment, the company was required to make the offer at par.

The company sold Allrecipes.com to Meredith Corp. for net proceeds of $150 million. The sale closed on Feb. 29, and the company used $85 million of the proceeds to repay bank loan debt.

Reader's Digest is a subsidiary of RDA Holding Co. It is a media and direct marketing company based in New York.

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