Quebecor has announced:
that it was withdrawing its refinancing plan involving an offer of approximately Cdn$250 million of its equity shares, an offer on a private placement basis of an aggregate of $500 million of new debt securities and amendments to the Company’s secured credit facilities. The Company has decided to withdraw the refinancing plan due to adverse current financial market conditions.
The previously noted potential redemption of IQW.PR.C, which was conditional on successful financing, will presumably not take place.
DBRS has announced it has:
placed the Long-Term and Preferred Share ratings of Quebecor World Inc. (Quebecor World or the Company) Under Review with Negative Implications.
This action follows an announcement by the Company that it has withdrawn the aggregate $750 million refinancing plan that was announced on November 13, 2007. The Company’s inability to implement its refinancing plan raises additional concerns with Quebecor World’s liquidity position and near-term financial flexibility. DBRS believes Quebecor World’s liquidity issues remain significant and could increase in severity should the Company fail to refinance all or portions of its existing credit facilities in the first half of 2008.
At Pfd-5, there’s not much further IQW.PR.C / IQW.PR.D can go! They were last downgraded October 5.
Update, 2007-11-23: Moody’s has put Quebecor World:
on review for possible downgrade and downgraded the company’s speculative grade liquidity rating to SGL-4 (indicating poor liquidity).
…
With the refinancing transaction having been cancelled, the company’s financing arrangements require prompt attention in order to assure ongoing orderly operations, and Moody’s considers near term default risk and, therefore, QWI’s long term debt ratings, to be inextricably linked to the company’s ability to normalize its financing arrangements (refer to Moody’s credit opinion for further commentary). Moody’s intends to review the company’s financing/liquidity plans in short order, with any resulting rating action being based on likely effectiveness and prospects for timely execution. With QWI appearing to be on the verge of generating modest positive cash flow as the cash drain related to its extensive retooling exercise nears completion, presuming that the company’s financing/liquidity plans are viable, Moody’s would affirm the existing B3 corporate family rating (CFR) and Caa1 instrument ratings. Should this not be the case, downwards ratings actions are likely.
[…] The company had to scrap a financing today, perhaps because investors kept throwing up. Now with a pre-tax bid-YTW of 138.67% (annualized) based on a bid of 19.00 and a softMaturity 2008-2-29. Note that the soft maturity will entail some risk to the exerciser, since the common will be received and have to be exchanged. On the other hand, if you want Quebecor common – or hold some already – and you’re happy with that, it could be quite attractive. Unfortunately, it cannot be easily arbitraged, since if you short the common now, it might quintuple (hah!) between now and the time the conversion price gets set. But something must work … hmm … buy the prefs at $19, you’ll get $26 worth of common at the February price … OK! Buy the prefs at $19, short the common, buy a call on the common at 36% over current price … I think that works, and I suspect it has a good chance of profit. But check my work first! […]