Solutia DIP amendment approved, lowering interest rate, extending term

By Caroline Salls

Pittsburgh, July 26 - Solutia Inc. obtained court approval for amendments to its debtor-in-possession facility, lowering the interest rate, according to a Tuesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

The interest rate was lowered to Libor plus 425 basis points from Prime rate plus 400 bps with a floor of 8%.

The company also extended the term of the facility for an additional six months to June 19, 2006 and increased the amount of cash proceeds Solutia can retain in connection with asset sales and extraordinary receipts before mandatory prepayment obligations are triggered.

Citigroup Global Markets Inc. acted as the lead arranger on the deal.

Solutia, a St. Louis-based manufacturer and provider of performance films, specialty chemicals and an integrated family of nylon products, filed for bankruptcy on Dec. 17, 2003. Its Chapter 11 case number is 03-17949.

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