Moody's downgrades Vertrue

Moody's Investors Service said it downgraded Vertrue Inc.'s corporate family and probability of default ratings to B3 from B2, along with its first-lien revolver expiring 2015 to B1 (LGD 2, 28%) from Ba3 (LGD 3, 31%), first-lien term loan due 2015 to B1 (LGD 2, 28%) from Ba3 (LGD 3, 31%) and second-lien term loan due 2015 to Caa2 (LGD 5, 81%) from Caa1 (LGD 5, 83%).

The outlook was changed to negative from stable.

The downgrades reflect a concern that expected revenue declines and continued earnings pressure will extend beyond current levels due to the company's declining member base and higher marketing spending projected for fiscal 2011, Moody's said.

The ratings are constrained by the company's materially declining billed-member base and an expectation that revenues and earnings will be pressured in the year ahead as Vertrue has scaled back its marketing spending in 2010, the agency said.

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