DBRS Releases Report on Yellow Media Inc.

DBRS has today released a report that supports the recent confirmation of Yellow Media Inc.’s (Yellow Media or the Company) Issuer Rating at BB, its Medium-Term Notes at BB with an RR4 recovery rating, its Exchangeable Subordinated Debentures at B (high) with an RR6 recovery rating and its Preferred Shares at Pfd-4 (low). The trend on its Issuer Rating, debt and preferred shares remains Negative.

DBRS notes that Yellow Media’s unsecured debt has average recovery prospects while its subordinated debt has poor recovery prospects under a base case default/recovery scenario. As such, DBRS has confirmed Yellow Media’s Medium-Term Notes recovery rating at RR4 (30% to 50% expected recovery) with an instrument rating of BB and confirmed its Exchangeable Subordinated Debentures recovery rating at RR6 (0% to 10% expected recovery) with an instrument rating at B (high).

Yellow Media’s Issuer Rating at BB reflects two primary factors: (a) increased concern regarding the timing, execution and success of Yellow Media’s transition from print to digital; and (b) limited financial flexibility and liquidity while facing tighter credit facility covenants and a steady stream of debt maturities beginning in 2013. The Negative trend reflects the above factors along with the uncertainty in the Company’s ability to not only execute on its transformation but to demonstrate its digital strategy is working while generating/attaining the liquidity necessary to continue to support this digital transition and its evolving capital structure over the medium term. DBRS notes that these factors are not mutually exclusive.

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Today’s report and the December 8, 2011, press release are available at www.dbrs.com or by contacting us at info@dbrs.com.