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S&P rates MemberWorks notes B
Standard & Poor's said it assigned its B+ corporate credit rating to MemberWorks Inc. and assigned its B rating to the proposed $150 million senior unsecured notes due 2014 and its B- rating to the existing $90 million subordinated convertible notes due 2010.
Net proceeds from the proposed senior unsecured notes will be used to fund the acquisition of Canada-based Lavalife Inc. and for general corporate purposes.
The outlook is stable.
S&P said the ratings on MemberWorks reflect some customer concentration risk, the competitive and fragmented online personals market, and its relatively low consolidated EBITDA margin. These factors are only partly offset by the company's good market position in a niche consumer services discount membership program market, good recurring revenue stream from renewals, and diversified distribution channels.
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