Solutia, Bondholders, Reach Agreement

New York, NY, February 28, 2008--A Manhattan bankruptcy judge has approved Solutia Inc.'s $220.5 million settlement with a group of bondholders, ending a dispute over unpaid interest that could have complicated the Solutia's plans after its exits Chapter 11 protection.

The settlement ends Solutia's fight with the bondholders over interest it would have paid had it continued making payments on the bonds through their 2009 maturity date.

The $220.5 million cash settlement, payable upon Solutia's emergence from Chapter 11 protection, allows it to avoid keeping $37.5 million in reserve while awaiting the outcome of litigation with the holders of the 11.25 percent senior notes.

Bondholders will get $220.5 million in cash plus all accrued but unpaid interest through the date of Solutia's exit from bankruptcy. The company expects to emerge from Chapter 11 protection Thursday.