S&P cuts Vertis debt to CCC

Standard & Poor's said it lowered its ratings on Vertis Inc., including its corporate credit rating to B- from B and senior secured second-lien rating and senior unsecured rating to CCC from CCC+.

All ratings were removed from CreditWatch, where they were placed on Feb. 24. The outlook is negative.

The downgrade reflects S&P's expectation that Vertis' operating results will remain under pressure in the intermediate term as a result of low advertising insert volumes and significant corresponding price competition, as well as unstable demand for direct mail.

In addition, S&P said while availability under the company's revolving credit facility is currently adequate at $107 million, the cushion under the bank covenant has tightened, and a violation could occur if operating performance does not stabilize in the next couple of quarters.

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