IQW.PR.C / IQW.PR.D Downgraded by DBRS … Again

It was only about five weeks ago that these issues were last downgraded and now DBRS has announced:

DBRS has today downgraded the long-term debt of Quebecor World Inc. (Quebecor World or the Company) and its debt-issuing subsidiaries to B from B (high) and the preferred share ratings to Pfd-5 from Pfd-5 (high). The trend on all ratings remains Negative.

The downgrade is a result of DBRS’s concern over the significance and nature of security pledged as part of the Company’s renegotiated bank agreement, which may have reduced the future financial flexibility of Quebecor World. Additionally, DBRS notes continued concern over the Company’s near-term liquidity constraints which could restrict its ability to execute on its longer-term business and financing plans.

The issues continue to be rated P-5 (Watch Negative) by S&P.

IQW.PR.C was mentioned as an arbitrage possibility on September 11 when it closed at 23.35-50, but potential profits have been greatly reduced in the last three-weeks-odd: it closed today at 24.36-98.

2 Responses to “IQW.PR.C / IQW.PR.D Downgraded by DBRS … Again”

  1. […] It appears that Quebecor would really prefer its IQW.PR.D holders to continue to elect fixed-rate, and not to exercise their right to convert to the ratchet-rate issue … which may be expected to pay 100% of prime for the next five years, given their recent downgrade to ‘deep junk’. […]

  2. […] At Pfd-5, there’s not much further IQW.PR.C / IQW.PR.D can go! They were last downgraded October 5. […]

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