R.H. Donnelley's $850 million "B" piece has been oversubscribed and was set to close as Loan Market Week went to press, said a banker familiar with the credit. The remainder of the $1.55 billion loan package is expected to close early this week, with final terms scheduled to be completed after the holiday, he added. Lead banks Deutsche Bank, Bear Stearns and Salomon Smith Barney priced the "B" tranche at LIBOR plus 4%, while the spread on the $125 million revolver and $575 million "A" loan is LIBOR plus 31/ 2%. The deal also includes pre-payment penalties. Bankers on the deal either declined to comment or did not return calls.
The Donnelley credit backs the $2.23 billion purchase of Sprint's directory publishing business. The acquisition is also being financed with proceeds from an offering of $300 million in senior notes and a $450 million issuance of senior subordinated notes. The bonds were oversubscribed with terms being set by the end of last week on the $300 million of eight-year senior notes, non-callable for four years, with a 9-91/ 4% yield. The $450 million in 10-year subordinated notes at an 11-111/ 4% yield are noncallable for five years. Goldman Sachs Capital Partners is also contributing toward the transaction by purchasing $200 million of Donnelley's cumulative convertible preferred stock. Calls to Donnelley officials were not returned.