NEW YORK (Dow Jones)--Yellow pages directories publisher Idearc Inc. (IAR) announced Thursday it has drawn on most of its $250 million revolving credit facility to shore up liqudity after a dismal third quarter. The company said it tapped $247 million under the facility about a week ago and intends to use to proceeds for general corporate purposes.
The news comes as Idearc posted a worse-than-expected drop in quarterly profit and said it retained Merrill Lynch & Co. and Moelis & Co. to review alternatives related to its capital structure.
Idearc's 8% bonds due 2016 slumped over three points on the news to 18 cents on the dollar to over 50%, according to levels from MarketAxess. Idearc, which was spun off from Verizon Communications Inc. (vZ) in 2006, revealed third-quarter earnings before interest, tax, depreciation and amortisation or EBITDA - a key measure of cash flow - slumped 21.6%. Net income for the quarter meanwhile slumped 37.6%, while total revenue fell 7.1%. Idearc joins a long list of speculative grade companies buttressing their liquidity positions by turning to their revolving credit lines amid concern they may not be able to gain access to funds in the capital markets.
Dallas-based television station operator Belo Corp., for instance, said Thursday that it drew $364 million on its revolving credit facility to retire $350 million of 8% senior notes due Nov. 3, plus accrued interest.
While, Freescale Semiconductor drew $460 million under its $750 million revolving loan and IT-outsourcing company Computer Sciences (CSC) fully drew its $1.5 billion commercial-paper backstop facility last week.
Others include Calpine Corp. (CPN), Dana Corp. (DAN), Pinnacle Foods Group Inc., American Airlines, Goodyear Tire & Rubber Co. (GT), General Motors Corp. (GM), and FairPoint Communications (FRP).
By Kate Haywood, Dow Jones Newswires;
Dow Jones NewswiresOctober 30, 2008 10:17 ET (14:17 GMT)
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