S&P upgrades Valassis

Standard & Poor's said it raised Valassis Communications Inc.'s corporate credit rating to BB- from B+, along with the recovery rating to 1 from 2 on the its senior secured credit facility, comprising a $50 million revolving line of credit due 2012, a $354 million term loan B due 2014 and a $117 million delayed-draw term loan due 2014. A recovery rating of 1 indicates an expectation of 90% to 100% recovery for lenders in the event of a payment default. The issue-level rating was raised to BB+ from BB-, the agency said.

The agency also said it upgraded the recovery rating on the company's 8¼% senior notes due 2015 to 4, indicating an expectation of 30% to 50% recovery in the event of a default, from 6. The rating was raised to BB- from B-. The ratings also were removed from CreditWatch, where they were placed with positive implications Feb. 1, 2010.

The outlook is stable.

The change reflects the amendment to Valassis' credit agreement, which reduces the company's revolving credit commitment and allows for the use of legal settlement proceeds to repurchase a portion of outstanding senior unsecured debt, S&P said.

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