InterviewN America chem debt trading at “absurd levels”

20 January 2009 21:56  [Source: ICIS news]

By Joseph Chang

NEW YORK (ICIS news)--Some debt securities in the North American chemical industry are trading at “absurd levels”, Moody’s Investors Service analyst John Rogers said on Tuesday.

One example is the $250m (€190m) in debt of NOVA Chemicals maturing in April, which is trading near 85 (85% of $1,000 par value), said Rogers, head of the chemical group at Moody’s.

“The implied annualised interest rate of that issue is over 100%,” he added.

“NOVA will likely get support from the Canadian banks and should have ended 2008 with upwards of $150m in cash,” Rogers said.

Moody’s gave NOVA a rating of Ba3 (equivalent to a rating of BB- by Standard & Poor's) with a negative outlook.

“Also, Hexion’s debt is trading in the teens, which means investors are basically saying the company is bankrupt. That seems pretty severe,” Rogers said.

Moody’s gave Hexion Specialty Chemicals a rating of B2 (equivalent to a Standard & Poor's rating of B-) with a negative outlook.

($1 = €0.76)

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By: Joseph Chang
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