S&P drops Quebecor to distressed

Standard & Poor's said it lowered the long-term corporate credit rating on Quebecor World Inc. to D from CCC and dropped the rating on its $400 million 9¾% senior unsecured notes due 2015 to D from CCC-.

S&P downgraded the company's other senior unsecured notes to CC from CCC-. The preferred stock rating remains unchanged at D. The ratings were removed from CreditWatch with negative implications, where they were placed Aug. 9.

The downgrade follows Quebecor's nonpayment of interest expense on its $400 million 9¾% senior unsecured notes, which was due Jan. 15.

S&P said that it could upgrade the ratings if the company makes the payment within the 30-day cure period.

According to the agency, Quebecor is in default on its $750 million revolving credit facility because the company was unable to raise the required $125 million by Jan. 15, which was a condition to the covenant waiver on Dec. 31.

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