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Valassis Favorably Unwinds Interest Rate Swaps

Press release from the issuing company

LIVONIA, Mich., Sept. 13 -- Valassis, the leading company in marketing services and Connective Media(TM), announced today that it has unwound the interest rate swaps entered into during June of 2004. In June 2004, Valassis swapped fixed rates on $50.0 million notational value of its 6 5/8% Senior Notes due in 2009 for variable rates. "Given the recent favorable movement in short-term interest rates and its impact on the economics of our swap agreements, we decided to unwind our swap position at no cost as of Sept. 2," said Robert Recchia, Valassis Executive Vice President and Chief Financial Officer. "The net result of the swaps is a savings of approximately $900,000 in interest expense since June 2004." The company's current public debt consists of $100.0 million of 6 5/8% Senior Notes due in 2009, $14.1 million of Zero Coupon Senior Convertible Notes due in 2021 with a yield of 3% and $160.0 Senior Convertible Notes due in 2033 with a yield of 1 5/8%. Valassis also has a revolving line of credit of $125.0 million with no outstanding balance.