Moody's downgrades Quebecor World

Moody's Investors Service said it downgraded Quebecor World Inc.'s corporate family and probability-of-default ratings to B2 from B1, Quebecor World (USA) Inc.'s senior subordinated rating to Caa1 from B3 and the senior unsecured ratings of Quebecor World Capital Corp. and Quebecor World Capital ULC to B2 from B1.

The loss-given-default assessments remain unchanged at LGD6 (94%) for Quebecor World USA's $130 million convertible senior subordinated notes and at LGD4 (50%) for Quebecor World Capital's $200 million senior notes due 2008, $400 million senior notes due 2013 and $150 million senior debentures due 2007 and Quebecor World Capital ULC's $450 million senior notes due 2016.

The outlook for all ratings remains negative.

The downgrade was prompted by Moody's belief that Quebecor World will be unable to make significant progress to lower leverage and improve interest coverage and cash flow within the rating horizon of approximately the next 18 months, and the outlook remains negative because the agency expects Quebecor World's credit metrics to be weak for the B2 rating in 2007, including a debt-to-EBITDA ratio of roughly 7x at the beginning of the year.

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