Moody's may cut Quebecor World

Moody's Investors Service said it placed Quebecor World Inc.'s long-term debt ratings on review for possible downgrade and downgraded the company's speculative grade liquidity rating to SGL-4, which indicates poor liquidity.

The downgrades include Quebecor World, Inc.'s speculative grade liquidity rating to SGL-4 from SGL-3; senior unsecured regular bond/debenture, (unchanged at Caa1) downgraded to LGD4, 66 from LGD4, 60; Quebecor World Capital Corp.'s senior unsecured regular bond/debenture, (unchanged at Caa1) to LGD4, 66 from LGD4, 60; and Quebecor World Capital ULC's senior unsecured regular bond/debenture, (unchanged at Caa1) to LGD4, 66 from LGD4, 60.

The ratings on downgrade review include Quebecor World, Inc.'s B3 corporate family rating; Caa1 senior unsecured regular bond/debenture; B3 probability of default rating; Quebecor World Capital Corp.'s Caa1 senior unsecured regular bond/debenture; Quebecor World Capital ULC's Caa1 senior unsecured regular bond/debenture.

Quebecor World, Inc.'s, Quebecor World Capital Corp.'s and Quebecor World Capital ULC's stable outlooks are now under review.

The action comes after the company said "adverse current financial market conditions" have caused the company to withdraw a refinancing plan involving an offer of about C$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. These steps would have significantly improved the company's liquidity position, Moody's said.

The company's financing arrangements now require prompt attention in order to assure ongoing orderly operations, and Moody's said it considers near term default risk.

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