CANEXUS CORP 6.5 PCT DEBS T.CUS.DB.D

RE:RE:RE:RE:Seeking Alpha Article - Canexus

[Calgaryrider]

I just want to point out that you can be within bank convenants (because they only calculate debt based on secured, bank debt - not convertible debs), but as a consequence still be at the risk of dilution BECAUSE of the debs.   And they can meet convenants now, but can they meet them at higher interest rates?  1% higher?  2% higher?  We know they have a lot of US denominated debt.  It's not implausible that US interest rates are higher next year.  Can they survive?  If there's risk, expect the banks to have a say as to what they do with that $75M.

With what's going on in the oil patch, where several banks are tremendously exposed, all the banks are riding their clients on much shorter leashes. 

With the performance of this management team, both on NATO and recently in chemicals too, I'd have them on a short leash. 

They didn't just screw up the project, which was inexusable in and of itself.  They screwed up things commercily that constrained the value of the asset (incl. take or pay contracts that were absurd).  Theys screwed up on timing and scheduling (risk managment).  They screwed up communication to the public about those contracts and both expected and actual performance ["Hey, we're loading 5.5. trains, they just happen to be short ones!, is that relevant?"] 
The track record of these clowns is - in a word - poor.

If you're truly convinced this is a double or triple from here, you should be buying more.....but what I hear is that your investment thesis has turned to 'hope'.....yes, a four-letter word.  I just don't subscribe to that approach.  There are better places to make more money sooner and more reliably.