Lyondell Chemical talks $1.775 billion two-parter: eight-year notes at 8% area, 10-year notes 25 bps behind eight year

By Paul A. Harris

St. Louis, Sept. 13 - Lyondell Chemical Co. issued price talk on its $1.775 billion two-tranche offering of senior unsecured notes (B1/B+/BB-) on Wednesday, according to market sources.

The Houston chemical company talked its tranche of eight-year notes at the 8% area. The eight-year notes come with four years of call protection.

Meanwhile Lyondell talked its tranche of 10-year notes to price 25 basis points behind the eight-year notes. The 10-year notes come with five years of call protection.

Tranche sizes remain to be determined.

The books are scheduled to close at 5 p.m. ET Thursday, except for San Francisco accounts. Pricing is expected late Friday afternoon.

JP Morgan, Banc of America Securities LLC, Citigroup and Morgan Stanley are joint bookrunners for the notes, which have been registered with the Securities and Exchange Commission. BNY Capital Markets, Inc., Deutsche Bank Securities, Scotia Capital, Societe General, UBS Investment Bank and Wachovia Securities are co-managers.

Proceeds will be used to fund the tender for $849 million of the company's 9 5/8% senior secured notes due May 1, 2007 and to repay a portion of the seven-year term loan used to finance Lyondell's acquisition of Citgo Petroleum Corp.'s 41.25% interest in Lyondell-Citgo Refining LP.

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