Hexion gets OK to amend loan, extend around $900 million term loans

By Sara Rosenberg

New York, Jan. 22 - Hexion Specialty Chemicals Inc. received enough consents to amend its senior secured credit facility and extended about $900 million of its term loan debt to May 5, 2015, according to an 8-K filed with the Securities and Exchange Commission on Friday.

Pricing on the extended term loan is higher than pricing on the non-extended term loan.

Also, the amendment permits revolver commitments to be extended to May 5, 2013, and, as of Jan. 12, the company had about $200 million in orders towards the extended revolver.

Pricing on the extended revolver is Libor plus 450 basis points, and committing revolver lenders are being offered a 200 bps upfront fee as well as a 200 bps ticking fee.

The extended revolver would take effect upon the May 31, 2011 expiration of the existing revolver.

In addition, the amendment allows for the issuance of $1 billion senior secured notes, which the company recently priced.

Proceeds from the notes will be used to repay $800 million of term loans and for general corporate purposes.

The amendment also revises some covenants contained in the credit agreement, resets the accordion feature to $200 million, permits the issuance additional senior notes or loans as long as an agreed amount of proceeds are used to prepay term loans and/or revolver loans at par, and allows the sale of additional debt, including junior or unsecured debt, in an amount not to exceed the accordion feature.

Hexion is a Columbus, Ohio-based thermoset resins company.

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