Vertrue $660 million credit facility expected as June business

By Sara Rosenberg

New York, June 6 - Vertrue Inc.'s proposed $660 million senior secured credit facility is expected to launch with a bank meeting sometime this month, according to a market source.

Lehman and JPMorgan are the joint lead arrangers and joint bookrunners on the deal, with Lehman the administrative agent and JPMorgan the syndication agent.

The facility consists of a $30 million six-year revolver, a $430 million seven-year first-lien term loan and a $200 million eight-year second-lien term loan.

According to filings with the Securities and Exchange Commission, the revolver and the first-lien term loan are expected to carry pricing of Libor plus 225 basis points, and the second-lien term loan is expected to carry pricing of Libor plus 550 bps.

The revolver has a 50 bps commitment fee.

The second-lien term loan carries call protection of 102 in year one and 101 in year two.

There will be no financial covenants under the term loans; however, there will be a maximum total leverage ratio under the revolver.

Proceeds will be used to help fund the buyout of Vertrue by management, One Equity Partners, Oak Investment Partners and Rho Ventures for $48.50 in cash per share of common stock. The transaction is valued at about $800 million.

Other buyout financing will come from a $175 million equity commitment.

In connection with the buyout, Vertrue will redeem, repurchase or defease all of its outstanding 9¼% senior notes due 2014.

A portion of the second-lien term loan can be delayed draw for 45 days if a defeasance deposit needs to be made for the notes.

In addition, immediately after the buyout, the company will deposit in a segregated escrow account an amount equal to the aggregate principal amount of its 5.5% convertible senior subordinated notes due 2010, which have not been converted into equity on or prior to the date of the buyout.

The buyout is expected to be completed in the first fiscal quarter of 2008, which ends on Sept. 30, and is subject to receipt of stockholder and customary regulatory approvals as well as satisfaction of additional customary closing conditions.

Vertrue is a Norwalk, Conn., internet direct marketing services company.

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