S&P downgrades Dex One

Standard & Poor's said it lowered the ratings on Dex One Corp. and related entities to CCC+ from B-.

The agency also said it lowered the rating on Dex Media East's $726 million outstanding term loan and Dex Media West's $627 million outstanding term loan to CCC. The agency revised the recovery ratings to 5 from 4, indicating 10% to 30% expected recovery in default.

S&P also said it revised the rating on R.H. Donnelley Inc.'s $966 million outstanding term loan due 2014 to CCC from B-. The recovery rating is 5.

The agency also lowered Dex One Corp.'s subordinated $300 million notes due 2017 to CCC- from CCC and the recovery rating remains at 6, indicating 0% to 10% expected recovery in a default.

The outlook is negative.

The downgrades reflect Dex One's continued weak operating performance and news that it is exploring a potential amendment, which would allow subpar repurchases of its term debt, S&P said.

The term loan is trading at a very significant discount to the par value, which suggests a high probability of a subpar buyback sometime over the next 12 months, the agency said.

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