Moody's: Valassis notes Ba3

Moody's Investors Service said it assigned a Ba3 (LGD 5, 80%) rating to Valassis Communications, Inc.'s proposed $260 million senior unsecured notes due 2019.

The proceeds will be used to redeem the remaining $242.2 million of outstanding 8¼% senior unsecured notes due 2015.

The company's Ba2 corporate family rating and stable outlook are not affected, Moody's said.

The offering favorably extends the company's maturity profile and is expected to lower cash interest expense modestly, the agency said.

Because the company is roughly at its 3x net debt-to-EBITDA leverage target, Moody's said it expects Valassis will utilize its free cash flow for acquisitions and shareholder distributions without materially increasing debt.

The agency said it believes the company has an incentive to maintain a conservative leverage profile.

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