Moody's may downgrade Vertrue

Moody's Investors Service said it placed Vertrue Inc.'s B1 corporate family and probability-of-default ratings and Ba3 (LGD3, 42%) $148 million senior unsecured notes due 2014 on review for possible downgrade following the announcement that the company entered into a definitive agreement to be acquired by Vertrue's management and an investor group consisting of One Equity Partners, Oak Investment Partners and Rho Ventures for $48.50 per Vertrue common stock, which totals roughly $800 million.

Closing of the transaction is expected to occur in the third quarter of 2007 and will be subject to the receipt of Vertrue stockholder approval, regulatory approval and other customary closing conditions.

The agency said the review will focus on the company's post-acquisition capital structure, the likelihood that Vertrue's post-acquisition credit metrics will fall below the B1 rating category and the possibility that the existing notes could remain outstanding post-acquisition. Under the note indenture, holders can tender the notes upon a 50% change of control in the voting stock.

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