S&P lowers Yell Group

Standard & Poor's said it lowered Yell Group plc's long-term corporate credit rating to CCC+ from B-.

The outlook is negative.

The downgrade follows Yell's 2012 financial results, which show that there is still limited visibility on the timing and level of the inflection point in Yell's revenues and earnings, S&P said.

This could hinder liquidity and potentially jeopardize the refinancing of its £2.4 billion credit facility due in 2014, the agency said.

Given delays in the implementation of Yell's new strategy to accelerate its online proposition, the agency said it believes that the possible inflection point of its revenues and earnings is now unlikely to happen before 2014, potentially more than one year later than anticipated.

The downgrade also takes into account an announcement by Yell that is has appointed qualified advisors to explore the financial options available to put in place a new capital structure, S&P said.

The downgrade mainly reflects an opinion that owing to Yell's upcoming material debt maturities in 2014, its persistently high leverage and that it is grappling with a tough operating environment, management could implement credit-dilutive debt-restructuring measures over the next 12 to 18 months, the agency said.

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