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Fitch: Dex Media on watch
Fitch Ratings said it placed all ratings of Dex Media Inc. and its subsidiaries, Dex Media East LLC and Dex Media West LLC, on Rating Watch negative.
Fitch said the rating action reflects the announcement that R.H. Donnelley has entered into a definitive agreement to acquire Dex for $4.2 billion as well as the assumption of outstanding debt of Dex and its subsidiaries.
Debt is expected to increase at the combined company by $2.3 billion to fund the cash portion of the transaction, as well as redeem all of the outstanding Goldman Sachs preferred stock, increasing leverage as defined as total debt to operating EBITDA to 7.0 times, the agency noted.
Affected ratings include the company's issuer default rating at B, $500 million 8% notes due 2013 at CCC and $750 million 9% discount notes due 2013 at CCC.
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