S&P assigns Solutia loan B+, notes B-

Standard & Poor's said it assigned its B+ loan rating to Solutia Inc.'s (D) proposed $1.2 billion senior secured term loan and a 3 recovery rating, indicating the likelihood of a meaningful recovery of principal in the event of a payment default.

The agency said it also assigned its B- rating to the company's proposed $400 million unsecured notes.

S&P added that Solutia will use proceeds from the proposed term loan, unsecured notes, an unrated $400 million asset-backed revolving credit facility and a $250 million rights equity issue to pay certain creditors upon emergence from bankruptcy, including creditors at Solutia Europe SA/NV (B/Developing/B).

The agency said it expects to withdraw its ratings on Solutia Europe when creditors of that company are paid down as planned.

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