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

RE:RE:Shareholder Approval of Deal

[Roxy27]

phoenix_trader,
One comment and a couple of material items to point out;
Dividend is very safe, which is why analysts were asking when their next increase review was expected on the conference call.

1) SPB has seasonality in that they are an energy distributer with peak volumes occuring in the winter. The good news is, winter is re-occuring, annually. Expect tougher YoY comps as we've had record cold winters.
2) In Q1 17.1% of cashflow was paid out in dividends. So, in their seasonally lowest reporting month they had a 50% payout to CFOA.
3) based on rolling last 12 months AOCF (a far more conservative metric) payout ratio has been 40% last 3 quarters and under 50% last 6 quarters.
4) SPB is REPLACING CUS debt with better debt terms, not levering up. They raised enough equity to reduce debt by 1/2pt and it was oversubscribed. Market likes SPB..
5) If you think CUS can easily repay their debt with a Debt/EBITDA ration of 5.3X, is seems contradictory that the company buying the same cashflow would have trouble servicing the debt.

Good luck with your CUS shares. IMHO SPB is a buy and I bought at a discount with CUS shares.