DBRS: IQW.PR.C / IQW.PR.D Under Review Negative

DBRS has announced it has:

placed the BB long-term debt ratings and Pfd-4 preferred share rating of Quebecor World Inc. and its related subsidiaries (Quebecor World or the Company) Under Review with Negative Implications. The Under Review – Negative status reflects DBRS’s concerns over the Company’s near-term liquidity, outcome of negotiations regarding the Company’s bank agreements (the existing waiver for which expires at the end of Q3 2007) and the Company’s strategic review of its European operations – all factors that have been exacerbated by continued weakness in the Company’s operating results. DBRS expects to complete its review after the end of Q3 2007.

DBRS is concerned with Quebecor World’s near-term liquidity, which continues to be negatively impacted by declining EBITDA and cash flow from operations, pressuring existing financial covenants and significantly restricting the Company’s financial flexibility.

It hasn’t been too long since these issues were downgraded from Pfd-4(high) to Pfd-4.

S&P rates the issues P-5(high) as of Sept 28/06; Watch Negative as of August 9/07. When placing the issues on Watch Negative, S&P stated:

“The CreditWatch placement reflect Quebecor World’s ongoing weak performance and our concerns that the company’s earnings, credit measures, and financial flexibility could weaken further due to a challenging pricing environment, operating losses in its European division, and intense competition,” said Standard & Poor’s credit analyst Lori Harris. “Furthermore, Quebecor World’s waivers from its bank group for certain financial covenants are only approved through to the release of its third-quarter 2007 financial results,”

HIMIPref™ maintains the Quebecor World preferreds in its database. These issues are recorded solely for the sake of continuity and have no influence on the calculation of yield curves.

One Response to “DBRS: IQW.PR.C / IQW.PR.D Under Review Negative”

  1. […] These issues were put on Review-Negative on August 14, 2007. They were downgraded from Pfd-4(high) on August 9, 2006. […]

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