S&P: Valassis on watch

Standard & Poor's said it placed its ratings on Valassis Communications Inc., including the B+ corporate credit rating, on Creditwatch with negative implications.

The agency said that the Creditwatch listing reflects its concern about EBITDA declines in the quarter ended Sept. 2008, its expectation for further declines in the fourth quarter of 2008 and in 2009, and the impact these declines will have on Valassis' credit measures.

S&P said it is also concerned that the company's cushion relative to financial maintenance covenants is thinning, adding that the bank's measure of senior secured debt to EBITDA was 3.2x at Sept. 2008, versus a covenant maximum of 4.0x.

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