Business News

Yellow Pages Income Fund Further Increases its Liquidity and Capital Resources

Monday 22. December 2008 - Yellow Pages Income Fund (TSX:YLO.UN) announces that it has increased the size of its revolving bank facility entered into in May 2008 from $250 million to $450 million.

This facility has a final maturity of May 2011 and can be used for general corporate purposes. Yellow Pages Group (YPG) currently intends to use this facility to refinance the Series 1 Medium Term Notes maturing in April 2009. This facility combined with its core revolving bank facility increases the company’s committed bank lines to $1.150 billion, providing YPG with ample liquidity to fund its operations. YPG will also continue to monitor fixed income market conditions under its June 2008 Short Form Base Shelf Prospectus.

YPG remains committed to investment grade credit ratings and to maintaining strong liquidity at all times.

Given recent trading activity in its units, YPG also wants to reaffirm its distribution policy and the current level of cash distributions of $1.17 per annum. Over the last two years, YPG has communicated its commitment to a successful conversion from an income trust to a corporate structure on or about December 31, 2010. Through the combination of continued growth in the Distributable cash per unit and more modest cash distribution increases, YPG’s payout ratio was progressively reduced to reach 78% in the third quarter of 2008.

The distribution policy is reviewed periodically by the Board of Trustees taking into account a number of factors including the current and prospective performance of the business. The company remains confident in its ability to achieve its objective of further reducing the payout ratio to the low 70% range by 2010.