A week ago, at an industry conference, Citigroup chemical stocks analyst PJ Juvekar, noting how cheap industries are in this depressed market, asked DuPont Co. cfo Nick Fanandakis, "Are you looking actively to make acquisitions, and in what size?" Fanandakis' reply, from the Citi transcript:

I know how to buy: "I ran our chemicals business for about three years. And during that time period, we doubled the top line and during that same period, we divested 14 businesses and acquired five. Obviously, the acquisitions were greater than the divestitures. So I have a background in this area."

We're shopping: "When I look at the corporation as a whole, I see opportunities, as I said, for growth in three very key strategic areas for us around safety and protection, around electronics, and around ag (seeds and pesticides)."

Why? "I am not going to do an acquisition just to bulk up. I am going to do an acquisition for strategic reasons that is going to provide me technology, market access, channel access, that sort of thing... So saying that, yes, I believe there will be opportunities for acquisitions as we go forward..."

"The size would depend. I mean it could be as small as a bolt-on or it could be transformational. It really depends on the value that we believe could be achieved through the acquisition."

Would you risk your credit ratings for a deal? "We are very comfortable with the credit ratings we have today, the single A status. We have access to very low debt." But for a "transformational acquisition," one that would take DuPont into new businesses, "I would be willing, for the right strategic acquisition, to slip down a notch in credit rating for a brief period of time...

"The acquisition we would be making would be accretive from a cash standpoint, so we would look to regain that decision rather quickly. But I would not be adverse to taking a one notch down for the right acquisition that might come up for a brief period of time."

How'd that feel to bond-buyers who'd just lend DuPont $2 billion in November? "Made our hearts flutter a bit," Gimme Credit analyst Carol Levenson told clients in a report today. She noted DuPont stands to lose its drug-licensing income next year with the end of a deal for Merck to licensed and sell DuPont high blood pressure drugs Cozaar and Hyzaar.. So, "to placate equity investors and deliver on its promise of 20% compound annual earnings growth after this gold mine is played out, DuPont may indeed need totake a dramatic M&A step," Levenson warned.

More signs: Though its debt is high, the company's hoarding cash, as if preparing to buy. The stock's down 9% in the past week.