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

RE:RE:Con Sub Deb

[Kherson]

Kherson wrote:

seriousinvest wrote: I fdon't understnad why they are not trading at least at par.  Superior's bonds are trading at par with interest rates 2/3% lower.  Am I wrong in assuming that Superior will assume the debt(the conversion privilege is way out of the money)?

The market is concerned that Canexus may go bankrupt before the transaction is completed! It looks to me that the company is getting extremely close to their borrowing limit of $400 million!
As of September 30th they had net debt of $303 million. But since then they have incurred another $60 million of debt to pay off the maturing debenture, which leaves them with about $37 million of available credit. Their 3rd Quarter loss was $17 million so I will assume that it will be about the same for the 4th Quarter, plus they have $56 million of Trade and Other Receivables that I feel has questionable Market Value!
Finally, keep in mind that the Book Value for shareholder's equity at the end of the 3rd Quarter was only $10 million...
Kherson