Moody's cuts R.H. Donnelley view to negative

Moody's Investors Service said it affirmed all of R.H. Donnelley Corp.'s ratings, including its B1 corporate family rating, while changing the outlook to negative from stable.

The ratings affirmed include R. H. Donnelley's speculative grade liquidity rating at SGL-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% , 6.875% series A-2 senior discount notes due 2013 at B3, LGD5, 84%, 8.875% series A-3 senior notes due 2016 at B3, LGD5, 84%.

The ratings of R. H. Donnelley Inc. are affirmed, including its 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 is affirmed at Ba1, LGD2, 15%, along with its 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 ½% 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%.

Dex Media East LLC's $100 million senior secured revolving credit facility due 2013 is affirmed at Ba1, LGD2, 15%, along with its $750 million senior secured delayed draw term loan A due 2013 at Ba1, LGD2, 15% and $350 million senior secured delayed draw term loan B due 2014 at Ba1, LGD2, 15%.

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

The change in outlook follows Donnelley's recently lowered guidance for 2008 financial results, Moody's said, and management's expectation of further cuts in customer spending on yellow pages print advertising in most of its markets, especially hard-hit subprime markets in Florida, California and Arizona.

Moody's said softening business conditions will preclude a reduction of leverage with debt-to-EBITDA ratio below 6.5x.

The ratings continue to reflect the company's high leverage (debt-to-EBITDA ratio exceeding 7x), vulnerability to the limited growth prospects, increasing competition and recent erosion of equity support provided to debt holders as a result of the substantial decline in the market value of the company's equity, the agency said.

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