Solutia launches term loan at Libor plus 350 bps, revolver at Libor plus 175 bps

By Sara Rosenberg

New York, Jan. 7 - Solutia Inc. launched its $1.2 billion seven-year term loan B (B1/B+) on Monday with price talk of Libor plus 350 basis points and its $400 million five-year asset-based revolver (Ba1) with talk of Libor plus 175 bps, according to a market source.

The term loan is being offered to investors with an original issue discount that is being guided in the 96 area, the source added.

Citigroup, Goldman Sachs and Deutsche Bank are the joint lead arrangers and joint bookrunners on the $1.6 billion exit financing deal.

Proceeds will be used to pay creditors under the company's plan of reorganization and to fund ongoing operations after its emergence from Chapter 11.

As part of its exit financing package, Solutia has also received a commitment for a $400 million senior unsecured bridge facility, which will not be used if $400 million of senior notes due 2016 are issued prior to emergence, and the company has arranged for a fully backstopped rights offering that will raise $250 million in new equity capital.

Solutia is a St. Louis-based manufacturer and provider of performance films, specialty chemicals and an integrated family of nylon products.

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