R.H. Donnelley plans $503 million term loan add-on, $2.092 billion bonds for Dex purchase

By Sara Rosenberg

New York, Oct. 6 - R.H. Donnelley Corp. plans on getting $503 million in incremental term loan bank debt and issuing $2.092 billion in high-yield bonds in connection with its acquisition of Dex Media Inc., according to an 8-K filed with the Securities and Exchange Commission Thursday.

JPMorgan is the lead bank on all of the financing.

The $503 million term loan B add-on will be obtained under the Dex Media West credit facility and will carry an interest rate of Libor plus 175 basis points, which is in line with existing B loan pricing.

The bonds will be divided into a $1.842 billion senior notes offering from R.H. Donnelley and a $250 million senior notes offering from Dex Media, the filing said

In connection with the transactions, the Dex West credit facility will be amended to allow for the incremental term loan B bank debt. All existing loan tranches will remain in place as is.

Under the terms of the agreement, each Dex share will be exchanged for $12.30 in cash and 0.24154 R.H. Donnelley share. Current Dex shareholders will receive about $1.85 billion in cash and 36.4 million R.H. Donnelley shares, for total equity consideration of about $4.2 billion. R.H. Donnelley will also assume Dex's net debt outstanding, expected to be about $5.3 billion at year-end 2005.

Both The Carlyle Group and Welsh, Carson, Anderson & Stowe, who collectively own 52% of Dex, have agreed to vote in favor of the transaction.

The transaction is expected to be completed during the first quarter of 2006.

Cary, N.C.-based R.H. Donnelley is a Yellow Pages publisher and directional media company. Englewood, Colo.-based Dex provides print directories and internet-based local search services.

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