Hexion offer for 8 3/8%, 9.2%, 7 7/8% debentures sees little interest

By Angela McDaniels

Tacoma, Wash., June 9 - Hexion Specialty Chemicals, Inc. said it received tenders for $21,095,000 principal amount of notes in the Dutch auction tender offer for its $77,512,000 outstanding 8 3/8% debentures due 2016, $106,245,000 outstanding 9.2% debentures due 2021 and $232,186,000 outstanding 7 7/8% debentures due 2023.

The offer began May 11 and expired at midnight ET on June 8.

The company received and accepted tenders for $5,031,000, or 6.49%, of the 8 3/8% debentures; $5,289,000, or 4.98%, of the 9.2% debentures; and $10,775,000, or 4.64%, of the 7 7/8% debentures.

The payment is $280 for each $1,000 principal amount of notes, which includes a $30 early participation payment. Holders will also receive accrued interest up to but excluding the purchase date.

The offer was amended on May 26 so that all holders who tendered will receive the early participation payment. Previously, only those who tendered by 5 p.m. ET on May 22 were slated to receive it.

The payment was set using a modified Dutch auction procedure. Holders submitted bids of between $180 and $280 per $1,000 principal amount of notes.

The company previously said the payment would be the lowest single bid price that would allow it to pay $200 million in the offer or, in the event that the purchase of all notes would result in Hexion spending less than $200 million, the highest bid price.

The offer was conditioned on the satisfaction of some customary conditions but was not conditioned on financing.

The dealer manager was Citi (800 558-3745 or 212 723-6106), and the information agent was Global Bondholder Services Corp. (212 430-3774 for banks and brokers only or 866 873-7700 for all others).

Hexion is based in Columbus, Ohio, and provides thermoset technologies and specialty products to the wood and industrial markets.

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