S&P downgrades Dex Media

S&P said it lowered the corporate credit rating on Dex Media Inc. to D from SD (selective default) and lowered the ratings on the debt issued by Dex Media's subsidiaries – RH Donnelley Inc., Dex Media East Inc., Dex Media West Inc. and SuperMedia Inc. – to D from CC.

The recovery ratings are unchanged. The agency also said it then withdrew the issue-level and recovery ratings on the Dex Media and the subsidiaries’ debt.

The downgrades follow news that Dex Media filed a voluntary petition May 17 under Ch. 11 of the U.S. bankruptcy code, S&P said.

Under the terms of the restructuring plan, Dex Media's senior secured lenders will exchange about $2.12 billion term loans for a new $600 million first-lien term loan, balance sheet cash and nearly all of the post-reorganized equity, the agency said.

The unsecured noteholders will receive a $5 million cash payment and warrants to purchase up to 10% of the post-reorganized equity, S&P said.

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