S&P rates Dex Media add-on B

Standard & Poor's said it assigned its B senior unsecured debt rating to Dex Media Inc.'s planned $250 million gross proceeds 9% discount notes due 2013, which is an add-on to the company's outstanding discount notes that were issued in November 2003.

Proceeds will be used to pay another dividend to the company's equity holders - The Carlyle Group and affiliates and Welsh, Carson, Anderson & Stowe and affiliates. In November, Dex Media paid a $750 million dividend.

In addition, S&P affirmed its BB- corporate credit and B senior unsecured debt ratings on the company. At the same time, S&P affirmed its BB- corporate credit and senior secured debt and B senior unsecured and subordinated debt ratings on Dex Media's operating subsidiaries Dex Media East LLC and Dex Media West LLC.

The outlook for all three companies is negative.

S&P said the ratings reflect Dex Media's substantial consolidated debt levels, with pro forma debt to EBITDA in the high-6x area, and meaningful debt amortization schedules at the operating companies. In addition, Dex Media's dividends to its equity holders reflect a change in the company's financial strategy and increase the financial risk of Dex Media, Dex East and Dex West.

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