St. Louis, MO, March 17, 2006--Solutia Inc., today announced it has successfully completed the extension and upsizing of its debtor-in-possession (DIP) credit facility at a reduced interest rate.
Solutia's amended DIP credit facility matures March 31, 2007, which represents a more than nine month extension. The size of the amended DIP credit facility is $825 million, which is an increase of $300 million.
The interest rate for the $650 million term loan portion of the DIP credit facility is LIBOR plus 350 basis points, a 75 basis point reduction from the rate on the previous $350 million of term loans. LIBOR (London Interbank Offered Rate) rates are benchmark interest rates for business loans and for financial instruments traded on global financial markets.
The revolver portion of the DIP credit facility is unchanged, at $175 million with an interest rate of LIBOR plus 225 basis points. 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.
"Our ability to successfully upsize and extend our DIP credit facility while reducing our interest rate is indicative of the positive momentum Solutia is gaining as it heads toward emergence from Chapter 11, which we anticipate later this year," said Jim Sullivan, chief financial officer, Solutia Inc.
Solutia filed its Plan of Reorganization and Disclosure Statement with the U.S. Bankruptcy Court for the Southern District of New York on Feb. 14, 2006. The Disclosure Statement hearing is scheduled for May 1, 2006.
