Moody's gives R.H. Donnelley notesB3, Dex Media East loan Ba1

Moody's Investors Service said it assigned a B3 rating to R.H. Donnelley Corp.'s proposed $500 million of additional series A-4 senior notes due 2017 and a Ba1 rating to Dex Media East LLC's proposed $1.2 billion senior secured credit facilities.

Moody's said it also affirmed R.H. Donnelley's B1 corporate family rating.

Affirmed ratings include R.H. Donnelley Corp.'s corporate family rating at B1, PDR at B1, speculative-grade liquidity rating of 1, 8.875% series A-4 senior notes due 2017 at B3, LGD5, 84%, 6.875% senior notes due 2013 at B3, LGD5, 84%, 6.875% Series A-1 senior discount notes due 2013 at B3, LGD5, 84%, 8.875% Series A-3 senior notes due 2016 at B3, LGD5, 84%, and 6.875% Series A-2 senior discount notes due 2013 at B3, LGD5, 84%;

R.H. Donnelley Inc.'s senior secured revolving credit facility due 2009 at Ba1, LGD2, 15%, senior secured term loan A due 2009 at Ba1, LGD2, 15%, and senior secured term loan D due 2011 at Ba1, LGD2, 15%;

Dex Media West LLC's senior secured revolving credit facility due 2009 at Ba1, LGD2, 15%, senior secured term loan A due 2009 at Ba1, LGD2, 15%, senior secured term loan B due 2010 at Ba1, LGD2, 15%, senior secured term loan B-1 due 2010 at Ba1, LGD2, 15%, 8.5% senior unsecured notes due 2010 at Ba3, LGD3, 41%, 5.875% senior unsecured notes due 2011 at Ba3, LGD3, 41%, and 9.875% senior subordinated notes due 2013 at B1, LGD3, 49%; and

Dex Media, Inc.'s 8% senior unsecured global notes due 2013 at B2, LGD4, 61%, and 9% senior discount global notes due 2013 at B2, LGD4, 61%.

The outlook is stable.

The ratings reflect the company's high leverage of 7.0 times debt to EBITDA at closing, the risk of further acquisition activity, the limited growth prospects of the directory publishing business, the increasing threat posed by competing directory publishers and web-based directory service providers in virtually all Donnelley's markets and the recent decline experienced by the company's print product sales, the agency said.

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