Nova Chemicals' Stock Tumbles On Debt Worries | February 9, 2009 Issue - Vol. 87 Issue 6 | Chemical & Engineering News
Volume 87 Issue 6 | p. 17 | Concentrates
Issue Date: February 9, 2009

Nova Chemicals' Stock Tumbles On Debt Worries

Department: Business

Shares of Canada's Nova Chemicals tumbled last week after it posted large fourth-quarter losses and credit ratings agencies downgraded its debt further into junk territory. On Feb. 2, Standard & Poor's lowered Nova's rating from B+ to CCC+ and Fitch Ratings downgraded the company from BB– to B–, ratings that label Nova's debt as a highly speculative investment. The agencies are concerned that the company needs to raise $100 million by the end of the month to maintain a line of credit. They are also worried that Nova has considerable amounts of debt maturing this year. "We believe the key to Nova Chemicals' survival in the next 18 months will be for it to shore up sufficient liquidity through its banks and other financing alternatives to meet several large debt maturities and amend its covenants," S&P analyst Jatinder Mall wrote to clients. On Jan. 29, Nova posted a $214 million loss for the quarter, versus earnings of $126 million in the year-ago period. The firm's shares opened trading at $3.72 on Jan. 29 and closed at $1.67 on Feb. 5.

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