Solutia Completes an Increase of its DIP Credit Fa
St. Louis, MO, January 26, 2007--Solutia said it has successfully completed the extension and upsizing of its debtor-in-possession (DIP) credit facility at a reduced interest rate.
Solutia's $1.225 billion amended DIP credit facility matures March 31, 2008. This represents a $400 million increase and a one-year extension over Solutia's prior DIP financing.
The interest rate for the $975 million term loan portion of the DIP credit facility is LIBOR plus 300 basis points, a 50 basis point reduction from the rate on the previous $650 million of term loans. The interest rate for the $250 million revolver portion of the DIP credit facility is unchanged from the rate of LIBOR plus 225 basis points that applied to the previous $175 million revolver.
The increased availability under the DIP financing provides Solutia with further liquidity for operations and the ability to fund mandatory pension payments that come due in 2007. Up to $150 million of the increased availability will be used to facilitate the purchase of Akzo Nobel's stake in its 50%/50% rubber chemicals joint venture with Solutia, known as Flexsys. The DIP credit facility can be repaid by Solutia at any time without prepayment penalties. Citigroup acted as lead arranger in the successful syndication of the financing.
