S&P downgrades Idearc

Standard & Poor's said it lowered Idearc Inc.'s corporate credit rating to B+ from BB, senior unsecured notes to B- with a recovery rating of 6 from BB- with a recovery rating of 5 and its senior secured credit facilities to BB from BBB-. The recovery rating on the loans remains unchanged at 1.

The ratings were removed from CreditWatch with negative implications, where they were placed on March 28, and the outlook is stable.

The agency said it has lowered its view of Idearc's business profile because of uncertainties regarding the company's ability to return to stable EBITDA generation over the intermediate term. S&P predicted that the company's operating margin will contract and EBITDA will decline at a rate of about 10% at a time when the company is facing secular challenges to its print product offerings, a slowing U.S. economy is hurting near-term operating performance and Idearc has limited flexibility in its leverage profile.

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