YELLOW PAGES INCOME FUND
TSX : YLO.UN

YELLOW PAGES INCOME FUND

June 14, 2010 16:21 ET

Yellow Pages Income Fund Announces $200 Million Offering of Convertible Debentures

MONTRÉAL, QUEBEC--(Marketwire - June 14, 2010) -

THIS MEDIA RELEASE IS NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Yellow Pages Income Fund (the "Fund") (TSX:YLO.UN) announced today that its subsidiary, Yellow Media Inc. (the "Issuer"), will be issuing $200 million aggregate principal amount of 6.25% convertible unsecured subordinated debentures (the "Convertible Debentures") on a bought deal basis. The Convertible Debentures pay interest semi-annually on April 1 and October 1 of each year commencing October 1, 2010. The Convertible Debentures have a maturity date of October 1, 2017 and will be convertible, at the option of the holder, for trust units ("Units") of the Fund at an exchange price of $8.00 per Unit.

The Issuer has also granted the underwriters the option to purchase up to $30 million principal amount of additional Convertible Debentures at a price of $1,000 per Convertible Debenture (plus accrued interest from the initial closing of the offering to the closing of the over-allotment option) to cover over-allotments, exercisable in whole or in part anytime up to 30 days following closing of the offering.

Net proceeds resulting from the sale of the Convertible Debentures of the Issuer shall be used by the Issuer to repay indebtedness, including under the Issuer's commercial paper program and to fund the redemption of the Issuer's outstanding 5.50% Exchangeable Unsecured Subordinated Debentures, and for general corporate purposes.

Pursuant to the Fund's previously announced plan of arrangement under the Canada Business Corporations Act, the Fund's income trust structure will be converted into a corporate structure. As a result, the Convertible Debentures will, without the requirement for the consent of any holders of Convertible Debentures, become debentures of the successor public corporation on the effective date of the arrangement having the same terms as the Convertible Debentures and will become convertible into common shares of the successor public corporation.

The Convertible Debentures will be offered for sale to the public in each of the provinces and territories of Canada pursuant to a short form prospectus of the Issuer to be filed with Canadian securities regulatory authorities in all Canadian jurisdictions.

The underwriting syndicate is led by RBC Capital Markets and TD Securities and Scotia Capital, acting as joint book-runners.

The offering is scheduled to close on or about July 8, 2010, subject to certain conditions, including conditions to be set forth in the underwriting agreement.

Yellow Media Inc., a subsidiary of Yellow Pages Income Fund, owns Yellow Pages Group and Trader Corporation. Yellow Pages Group (YPG) is Canada's leading performance media and marketing company. The Company brings consumers and businesses together locally through its network of print, digital and mobile properties. YPG enables consumers to make smarter decisions, helping people find what they need wherever and whenever. YPG partners with businesses to build successful marketing and lead generation programs, helping them grow their business. Trader Corporation (Trader) is a leader in print and digital vertical media and offers a broad set of services such as inventory management, web solutions, optimization of media spend, and lead generation campaigns. Trader caters to the automotive, real estate and generalist verticals. Yellow Media Inc owns and operates some of Canada's leading properties and publication including Yellow Pages™ directories, YellowPages.ca™, Canada411.ca™, Auto Trader™(.ca), Home Trader™(.ca), and LesPAC.com. For more information, www.ypg.com.

The Convertible Debentures have not been, nor will be, registered under the United States Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold in the United States or to U.S. persons absent registration or applicable exemption from the registration requirement of such Act and applicable state securities laws. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to qualification under the securities laws of any such jurisdiction. 

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