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

news for nato

[mike49]

i don't know why cus has to be so murky in their releases.a mid year contract on take or pay is really no more than an option that can be traded or exercised.
how much moves today is the question.
no matter-build it and they will come.in the end infrastructure is worth more than the day to day.look at all of the new retail reits.
if oil doesn't pan out near term there is a yard there that can't be built on short notice in the future.intermodel,grain,gravel,etc.
and i am not being silly.
i think cus is conflicted.the ceo said he would sell ANYTHING if the price was right but probably getting lowballs for everything and not knowing where to apply the focus.
imo,everything in the cus book is having the tire kicked but hard not to get bent over.
remember-this used to be #1 bossiamchemical company.
my advice-(not worth beans -i know)
restructure to 2 divisions or similar.follow the model created by enbridge,etc and transfer the asset with divvy(if affordable) down and ride out the storm with an emphasis on doing what you do right.
my prediction-sale of something when appeasement should be off the table.
my hope- a hedge company or pension plan buys the whole works and keeps or deals each assett based on some logic (i admit-i do have an altrusic side but money and the deep pockets that hold it rule).
enough already

[Calgaryrider]

This press release is a direct contradiction to the asset sale strategy that was discussed by management in the fall.  Basically, they said that they were not going to take on any new contracts in order to maximize the value of the asset for any organization that may want to acquire it. Clearly, taking on this new contract indicates that they do not have ANY attractive bids and that they'

[ocean112]

That is quite a leap - that taking on new contracts implies few attractive bids when management also said they have recevied numerous proposals (quote from November presentation) - and Management has invited some to bid (not the other way around) - it seems like management is calling the shots who will bid on NATO.   If there was lack of interest - I suppose they would take any bid that comes

[Calgaryrider]

When that article was written, WCS was $70 and WTI was $85, not $33 and $48, respectively.   If these prices continue US shale production will tank and Alberta production will ALSo be under pressure.......less supply, plenty of distribution capacity.......less value for Canexus. If I'm a producer what use do I have for an asset that's already contracted out at capacity?..... None!

[ocean112]

i'm just getting back on this board after a few months off - but man - you're sounding a lot like Kherson.  Bankruptcy?  Seriously?  I take it you didn't read thier latest Q3 report.  Here is an excerpt.  Effective October 15, 2014, the Credit Facility agreement was amended and restated to provide, among other things, revised financial covenants with

[Calgaryrider]

I respectfully disagree with a lot of your response.  1) Yes, covenants were relaxed and yes, they have interest coverage, but don't forget about the $70M / year they're still shelling out in dividends.  With almost no cash on hand, this company is living paycheck to paycheck.  The balance sheet is being raped. If rates go up, look out. 2) To say WTI is falling

[ocean112]

so wouldn't they cut the dividend by 50% if NATO doesn't sell as another option - freeing up $35M to pay the interest expense and ride this out instead of declaring bankruptcy.  I mean,  bankruptcy is a measure of last last (last) resort would you think?   It seems to me CUS has options for a NATO sale or no NATO sale to manage debt.  The fact the banks relaxed the

[Calgaryrider]

If covenants are  broken - and they likely are AGAIN, or on the verge of being broken - the senior lenders (the banks) can call their loans immediately, as in, this afternoon.  This would make CUS bankrupt.  Remember, they already relaxed their older covenenants - either because they were being trashed or on the verge of it.  When it's the duty of the management to

[pjn0987654321]

"I do agree that management has had the option to cut dividends for more than a year, but, ask youself why that hasn't happened." They already cut once -   "The Board of Directors declared a quarterly dividend of $0.10 per common share, representing a 27% reduction from the previous quarterly dividend of $0.1368. This change results in Canexus

[Calgaryrider]

They cut their annual divs from $100M to $70M. Greeeeeat.  Let's give them a cookie. Meanwhile, on paper, they are bleeding cash to the extent that they live paycheck to paycheck and have $5M left in hand every quarter. God help them if the core interest rate goes up OR the value of their assets backing the loans goes down, which increases lender risk, which increases interest rates

[Kherson]

But if one reads further in that NR, you will find that the reduced dividend still resulted in a 354% payout ratio... Kherson

[pjn0987654321]

Merely pointing out there had been a cut when someone asserted "that hasn't happened". I didn't claim the cut was sufficient, Kherson.  But since you bring up the subject of the payout ratio, it is one of the highest I've seen in a long time. 

[ocean112]

Covenants are on the verge of being broken again? (AGAIN? - Can you show me when in the PAST they were broken cuz i'm sure that would have made front page news). If you are taking total debt to EBITDA to back up your claim they are on the verge of breaking thier covenant, then clearly you haven't read the definition of total debt.  I'll help you out (pg. 72 of 2013 annual report)

[Kherson]

I think you hit the nail on the head Calgaryrider. What is sad and I would believe criminal is that the NR that was released to the Market on Wednesday, was already known by a few the day before, hence the huge volume of shares traded and the big drop in price on Tuesday. When we see these things being done on a regular basis, one has to question the integrity of the Market. One also has to