S&P rates YPG notes BBB-

Standard & Poor's said it assigned a BBB- debt rating to YPG Holdings Inc.'s proposed C$300 million 7¾% series 10 senior unsecured medium-term notes due March 2, 2020.

The notes are fully and unconditionally guaranteed by 100%-owned operating subsidiaries Yellow Pages Group Co. (not rated) and Trader Corp. (not rated) as well as by parent Yellow Pages Income Fund.

Proceeds will be used for general corporate purposes, to redeem the company's C$150 million 4.65% medium-term notes, series 6, due Feb. 28, 2011 and to repay debt outstanding under the company's commercial paper program.

"The BBB- long-term corporate credit rating and stable outlook on YPG reflect what we view as the company's solid business risk profile, supported by its position as the leading publisher of telephone directories in Canada and national provider of classified advertising," S&P analyst Madhav Hari said in a statement.

"The rating also reflects YPG's track record of sustaining healthy operating margins in the core directories operations as well as its commitment to reducing debt in the near term," Hari added.

These factors are partially offset by what we consider the company's aggressive financial risk profile characterized by currently high debt leverage and weak cash flow protection measures.

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