The Successful Investor Hotline – Friday, January 23, 2009

Article Excerpt

NOVA CHEMICALS CORP., $4.76, Toronto symbol NCX, fell 20% this week on fears that the credit crisis will hurt its ability to refinance part of its debt, particularly as the slowing economy has lowered demand for its industrial plastics. Nova’s long-term debt at September 30, 2008 was $1.5 billion U.S., which is equal to 4.7 times its current market cap. This figure excludes a $250-million U.S. bond due in April 2009. Nova has $575 million U.S. in cash and untapped credit lines, so it can easily meet this obligation. The company aims to negotiate better terms for its remaining debt, which includes over $1 billion U.S. due over the next two years. Due to the current economic slowdown, Nova is expanding its cost-cutting program, including reducing its workforce by 15%. These moves should save it $100 million U.S. in 2009 and help Nova pay down its debt. Nova Chemicals is still a buy for long-term gains. IMPERIAL OIL LTD., $38.77, Toronto symbol IMO, is…