DBRS confirms Quebecor Media

DBRS said it confirmed the issuer rating of Quebecor Media Inc. at BB (low), along with its secured bank debt at BB (high) with a RR1 recovery rating and senior notes rating at BB (low) with a RR4 recovery rating.

The trend is stable.

The confirmation follows news that the company intends to repurchase about 20 million shares from Caisse de depot et placement du Quebec for $1 billion, expected to be financed by debt, DBRS said.

At the same time, Quebecor Inc., which owns 54.7% of Quebecor Media, will purchase 10 million shares from Caisse de depot in exchange for $500 million subordinated convertible debentures due 2018.

Together, these two transactions will reduce Caisse de depot's ownership in Quebecor Media from 45.3% to 24.6%, the agency said.

DBRS said it estimates that the incremental debt at Quebecor Media will increase its consolidated gross debt-to-EBITDA to 3.6x from 2.9x on a pro forma basis.

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