S&P welcomes IPIC’s bid for NOVA, eyes ratings upgrade

25 February 2009 05:24  [Source: ICIS news]

SINGAPORE (ICIS news)--Standard and Poor’s (S&P) may consider upgrading NOVA Chemical's credit ratings, welcoming the bid of Abu Dhabi’s International Petroleum Investment Co to acquire the Canadian chemical producer.

The credit ratings agency said late on Tuesday it has placed NOVA on CreditWatch with implications revised to positive from negative.

S&P said IPIC’s $2.3bn (€1.79bn) bid for NOVA was a “positive outcome” that should help the chemical company address its immediate liquidity issues, possible violation on debt covenants later this year and its refinancing risks on debt maturing in 2010.

IPIC will be providing NOVA with a $250m backstop facility, which could be used to service upcoming bond payment, as part of the acquisition, said the ratings agency.

S&P also welcomed the $150 million financing that NOVA managed to secure from Export Development Canada (EDC) and three other banks.

“In our view, the company now has enough available under its various credit facilities to make the upcoming $250mn bond payment,” the ratings agency said.

“S&P will likely resolve the CreditWatch on NOVA once the transaction is completed and we have a better understanding of the new capital structure and what type of financial support will be provided by the parent company,” it added.

($1 = €0.78)

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By: Pearl Bantillo
+65 6780 4359



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