The Globe and Mail

Pierre Karl Peladeau just found out that a harsh new era has begun in credit markets.
Mr. Peladeau and his crew were forced to put printer Quebecor World into creditor protection early Monday after losing a very public stare-down with banks.
A rescue financing backed by parent Quebecor, run by Mr. Peladeau, and restructuring fund Tricap Partners was just too cute by a half for banks that had, until August, been willing lenders. Quebecor World carries $2.5-billion of debt. Mr. Peladeau misread the sea change in sentiment among lenders that has come with the credit crunch.
Instead, a new $1-billion (U.S.) credit facility is in place from Credit Suisse and Morgan Stanley, who will now call the shots. These lenders now rank above bondholders and existing banks, which include Royal Bank of Canada, Citigroup and Bank of America. Equity holders, including Quebecor, will be lucky to end up with pennies for their shares.
Watch for North America’s second largest printer to be sold in the not-to-distant future. Private equity fund Cerebrus or an industry rival are likely to take all or parts of Quebecor World, which was founded by Mr. Peladeau’s father. The question now is how much banks and bondholders can realize on their loans to the Montreal-based company.