S&P up Yellow Pages notes to B, view to positive

S&P said it upgraded Yellow Pages Ltd.’s 8% senior subordinated debentures to B from B- and revised the recovery rating on the debt to 2 from 3. The 2 recovery rating indicates S&P’s expectation of substantial (70%-80%; rounded estimate: 85%) recovery in a default scenario. S&P also revised the outlook to positive from stable.

“The positive outlook reflects Yellow Pages reduced financial risk following a sizable permanent debt reduction. On Dec. 2, 2019, Yellow Pages fully repaid its C$79.5 million senior secured notes outstanding as of Sept. 30, 2019, from internally generated cash flow. With this payment, Yellow Pages has reduced its debt balance by about C$167 million in fiscal 2019 alone. Given the significant repayment, the company's total debt balances are lower than we had previously anticipated. As a result, we now expect the company to exit 2019 with S&P Global Ratings' adjusted debt-to-EBITDA ratio close to 2x, which is a 0.5x improvement from our previous expectations,” said S&P in a press release.

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