Fitch cuts Solutia senior notes to D

Fitch Ratings said it has downgraded Solutia Inc.'s senior secured credit facility rating to DDD from B- and the ratings on the senior secured and senior unsecured notes to D from CCC.

The senior secured note rating applies to the 11.25% notes and the euro notes. The senior unsecured note rating applies to the 6.72% and 7.375% debentures.

Fitch said the ratings downgrade reflects Solutia's recent Chapter 11 bankruptcy filing and continued weak operating performance.

Solutia's ratings are supported by the company's diverse business portfolio, integrated nylon position, and the brand recognition of some of its major product lines (e.g. Wear-Dated carpet and Saflex plastic interlayer). Weak economic conditions have pressured the company's earnings in recent years.

Lower earnings, together with Solutia's high debt level, have weakened the company's credit statistics. For the trailing 12-month period ending March 31, 2002, EBITDA-to-interest remained the same at 2.8 times (x) relative to the end of 2001. For the same period, total debt-to- EBITDA has declined to 4.8x from 5.1x at the end of 2001.

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