Deutsche Bank, Bear Stearns and Salomon Smith Barney finalized the structure for the $1.55 billion credit facility backing R.H. Donnelley's $2.23 billion acquisition of Sprint's directory publishing business at a bank meeting last Thursday. The credit, which is rated Ba3, will include a $125 million revolver, a $575 million "A" term loan and an $850 million "B" tranche, according to a source familiar with the credit. Pricing is LIBOR plus 31/ 2% on the pro-rata portion and LIBOR plus 4% on the "B" piece. Bankers on the deal either declined to comment or did not return calls by press time.
In addition to the credit, the acquisition will be financed with proceeds from a $300 million offering of senior notes and a $450 million issuance of senior subordinated notes. Goldman Sachs Capital Partners also is contributing toward the financing by purchasing $200 million of Donnelley's cumulative convertible preferred stock. Calls to Donnelley officials were not returned.