S&P rates R.H. Donnelley notes B+

Standard & Poor's said it assigned its B+ rating to R.H. Donnelley Corp.'s proposed $300 million senior notes, reflecting the issue's structural subordination to debt issued at operating subsidiary R.H. Donnelley Inc.

At the same time, S&P affirmed its BB corporate credit and other ratings on R.H. Donnelley. The outlook is stable.

The company will use $277 million of the notes proceeds to redeem 50% of the company's outstanding convertible preferred stock from investment partnerships affiliated with The Goldman Sachs Group.

S&P said the ratings reflect the consolidated creditworthiness of R.H. Donnelley. Credit quality reflects the company's substantial debt levels, attributable to the $1.4 billion September 2004 acquisition of SBC Communications Inc.'s directory publishing business.

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