NOVA credit rating may be upgraded after IPIC bid – Moody’s

24 February 2009 02:03  [Source: ICIS news]

SINGAPORE (ICIS news)--Moody’s Investor Service said on Monday it may upgrade the credit ratings of NOVA Chemicals following an announcement that a Middle East sovereign wealth fund would acquire the Canadian producer for $2.3bn (€1.8bn).

Moody’s “B2” corporate family rating for NOVA and its “B3” rating for all of the chemical producer’s other senior unsecured ratings have been placed under review for a possible upgrade.

It added that NOVA's Speculative Grade Liquidity rating was also raised to SGL-3 from SGL-4 as it looks like the company can meet the conditions set under existing credit lines.

The Abu Dhabi-based International Petroleum Investment Company (IPIC) has made an all-cash offer of $6/share for NOVA on Monday.

NOVA has also raised $150m in new financing from a syndicate of banks and the Export Development Bank of Canada on Monday before the take-over bid was announced, beating its 28 February deadline to raise $100m and ensuring it access to existing credit lines.

“The $250 million back-up facility from IPIC and $150 million of revolving credit (from the banks) should provide sufficient additional capital to meet this requirement and finance NOVA's April maturity,” said Moody’s in a statement.

"NOVA's announcements signal the potential for a substantial improvement in the company's credit profile, if the acquisition by IPIC is completed," said John Rogers, senior vice president at Moody's.

“The review will focus on potential changes to NOVA's capital structure, strategic priorities or financial policies as a result of its ownership by IPIC,” he added.

Prior to the take-over bid, Moody’s, along with Standard & Poor’s and Fitch Ratings, has downgraded NOVA’s credit ratings on concerns about its ability to pay its debts.

($1 = €0.78)

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By: Pearl Bantillo
+65 6780 4359

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