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Solutia have completed refinancing
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Solutia Inc. announced that it has completed the extension and amendment of the company's credit facility and that the funds from the previously announced bond sale have been released from escrow.
"We are pleased that we have completed refinancing the corporation," said Chief Financial Officer Robert Clausen.
"Today's economic climate has made this process challenging, but the extended credit facility will give Solutia the financial flexibility needed to continue to manage our businesses for healthy returns to our investors. Solutia's strong portfolio of products and exciting growth opportunities continue to be a large part of our success, despite the uncertainty we are seeing in today's financial markets," Clausen noted.
The amendment of the facility extends the maturity for two years and reduces the borrowing capacity from $800 million to $600 million. The facility is comprised of a $300 million term loan and a $300 million revolving credit facility. The extension provides a higher return to the lenders and grants additional collateral to them in exchange for the longer maturity. Interest expense, given the effect of the new facilities, is expected to be about $107 million in 2002.
On July 9, 2002, Solutia closed the private sale of 223,000 units consisting of $223 million of senior secured 7-year notes as well as warrants to purchase common stock. Purchasers of the bonds received warrants for the purchase of 5,533,522 shares of Solutia common shares. The sale generated gross proceeds of approximately $200 million. The notes were issued by SOI Funding Corp., a special purpose entity that placed the proceeds from the sale in escrow pending assumption of the notes by Solutia in conjunction with approval of the bank amendment. With today's approval of the extension, funds were released from escrow. Approximately $155 million of proceeds were deposited with the trustee for the notes maturing on October 15, 2002 to pay the principal and interest at maturity. The remaining proceeds were used to repay a portion of Solutia's outstanding bank debt under the credit facility.
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August 30th, 2002
Source: Solutia |
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