S&P lowers Vertrue to B

Standard & Poor's said it lowered Vertrue Inc.'s corporate credit rating to B from B+ and affirmed the company's $30 million first-lien revolving credit facility due 2013 and $430 million first-lien term loan due 2014 at B+ with a recovery rating of 2 and its $200 million second-lien term loan due 2015 at CCC+ with a recovery rating of 6.

The ratings - excluding the B- $90 million 5.5% senior subordinated convertible notes due 2010 - were removed from CreditWatch, where they were placed with negative implications on March 22, and the outlook is stable.

The agency said the downgrade reflects the increase in financial risk resulting from the company's leveraged acquisition by a group of private-equity sponsors including One Equity Partners, Rho Ventures and Brencourt Advisors LLC. The 5.5% convertibles remain on CreditWatch pending further information about their redemption.

The ratings on Vertrue reflect some customer concentration risk, the competitive and fragmented online personal-ads market and an acquisition-oriented growth strategy, S&P said.

These factors are only partially offset, in the agency's view, by the company's good market position in niche consumer discount membership programs and its good recurring revenue stream from renewals.

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