Yellow Pages subsidiary makes offer for 5.5% exchangeable debentures

By Jennifer Chiou

New York, Nov. 4 - Yellow Pages Income Fund announced that its subsidiary, YPG Holdings Inc., gave the go-ahead to a substantial issuer bid to purchase for cancellation all of its C$300 million of 5.5% exchangeable unsecured subordinated debentures due 2011.

The company said it will pay C$1,020 in cash for each C$1,000 principal amount of debentures.

Yellow Pages will also pay accrued interest to the settlement date.

Assuming that the notes are settled on Dec. 14, the expiration date, the interest payment would be equal to C$20.4932 per C$1,000 principal amount.

The offer will end at 5 p.m. ET on Dec. 14.

Yellow Pages said that the offer will be financed through a C$300 million special-purpose committed credit facility as well as YPG Holdings' existing commercial paper program.

On Tuesday, the debentures (TSX: YPG.DB) had a closing price of C$98.90 per C$100 principal amount of debentures.

The offer is conditioned upon a minimum of C$120 million principal amount of debentures being deposited as well as regulatory approval.

The independent formal valuation of Cole & Partners Ltd. concluded that the fair market value of the debentures, excluding accrued interest, per C$1,000 principal amount at Oct. 15 ranges from C$985.20 to C$1,009.70, with a mid-point of C$997.45.

Yellow Pages Income Fund is a Montreal-based fund owning a 96% ownership interest in Yellow Pages Group and Trader Corp. Yellow Pages Group is Canada's largest telephone directories publisher while Trader is a Canadian printing and online vertical media company.

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