Momentive to augment coupon by 25 bps on several series of notes

By Jennifer Chiou

New York, Jan. 18 - Momentive Performance Materials Inc. will raise by 25 basis points the interest rate of each of its issues of $765 million of 9¾% senior notes due 2014, €275 million of 9% senior notes due 2014, $300 million of 10 1/8% and 10 7/8% senior toggle notes due 2014 and $500 million of 11½% senior subordinated notes due 2016, according to an 8-K filing with the Securities and Exchange Commission.

The Wilton, Conn.-based producer of silicone-based products and derivatives said that the coupon boost is the result of it having yet to complete an exchange offer for the securities.

Because the company was to have had consummated an exchange offer by Jan. 18 and did not do so, the coupons will be increased by 25 bps for a 90-day period. Thereafter, the interest rates will be lifted by an additional 25 bps per 90-day period, capped at 100 bps per year.

Once the exchange offer is completed - expected on Jan. 23 - the additional interest will cease to accrue.

The notes were issued on Dec. 4, 2006.

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