R.H. Donnelley $2.6 billion credit facility to launch next week

By Sara Rosenberg

New York, July 28 - R.H. Donnelley Corp. is scheduled to hold a bank meeting next week for its proposed $2.6 billion credit facility, according to a market source. JPMorgan and Bear Stearns are the lead banks on the equally underwritten deal, with JPMorgan listed on the left.

The facility will contain a revolver, a term loan A and a term loan B, the source said, adding that more details would be available shortly.

Proceeds will be used to fund the acquisition of SBC Communications Inc.'s directory publishing business in Illinois and Northwest Indiana for $1.42 billion in cash. The transaction is expected to close in the third quarter subject to regulatory approval and certain closing conditions.

"This important acquisition completes our strategic transformation to a fully integrated yellow pages publishing and directional media company from a sales agent and pre-press publishing vendor," said David C. Swanson, chairman and chief executive officer, in a company news release. "Consistent with our strategy, we'll now control all our assets, enabling us to direct all aspects of our business and better positioning us to create long-term value for shareholders."

Following the acquisition, R.H. Donnelley expects to have pro forma 2004 consolidated adjusted revenue of about $1 billion and EBITDA of about $586 million, assuming a Jan. 1, 2004 close.

Leverage immediately following the transaction will be about 5.8 times pro forma adjusted 2004 EBITDA, the company news release said.

R.H. Donnelley is a Cary, N.C., yellow pages publisher and directional media company.

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