R.H. Donnelley issues price talk on $2.1 billion three-part note offering

By Paul A. Harris

St. Louis, Jan. 12 - R.H. Donnelley Corp. issued price talk Thursday on its $2.1 billion proceeds offering of senior notes in three tranches (Caa1/B+/CCC+), according to an informed source.

Pricing is set for Friday morning.

The Cary, N.C.-based Yellow Pages publisher talked its $1.2 billion series A-3 10-year senior notes at 8¾% to 9%. Meanwhile the company talked its $600 million proceeds series A-2 6 7/8% eight-year senior discount notes at 8½% to 8¾%.

Proceeds from the series A-3 and series A-2 notes will be used to fund a portion of the repurchase of outstanding shares of the company's convertibles.

Meanwhile R.H. Donnelley also talked its $332 million proceeds series A-1 6 7/8% eight-year senior discount notes at 8½% to 8¾%.

Proceeds from the series A-1 notes will be used to fund a dividend to shareholders in connection with the acquisition of Englewood, Colo.-based print directories and internet-based local search services provider Dex Media, Inc. and for general corporate purposes.

JP Morgan, Bear Stearns & Co. and Credit Suisse First Boston are joint bookrunners for the notes, which are being sold via Rule 144A with registration rights. Goldman Sachs & Co, Deutsche Bank Securities, Wachovia Securities, UBS Investment Bank and Banc of America Securities are co-managers, with other co-managers expected to emerge.

All three tranches of notes and the existing R.H. Donnelley (Holdco) 6 7/8% notes due Jan. 15, 2013 ($300 million priced at par on Jan. 11, 2005) are pari passu.

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