Solutia Receives Commitment for $2B Exit Financing

St. Louis, MO, October 31, 2007--Solutia Inc. said it has received a fully underwritten commitment for $2 billion of exit financing that would be used for operations and to pay creditors upon Solutia's emergence from Chapter 11 bankruptcy.

Citi, Goldman Sachs, and Deutsche Bank Securities Inc. are acting as joint lead arrangers for the exit financing.

"With this commitment, we are well on our way to achieving the fourth and final component of the reorganization strategy we identified at the outset of our case, which is to put in place an appropriate capital structure for the company," said Jeffry N. Quinn, chairman, president and chief executive officer, Solutia Inc.

The financing package includes a $400 million senior secured asset-based revolving credit facility, a $1.2 billion senior secured term loan facility, and a $400 million senior unsecured bridge facility.

"Despite the recent turbulence in the debt capital markets, we have obtained an exit financing package that will position Solutia for continued success and provide adequate funds to deliver on our business strategies," said James M. Sullivan, Solutia’s senior vice president and chief financial officer.

In addition to the fully underwritten $2 billion exit financing package, Solutia has arranged for $250 million in new equity capital, which will fund retiree benefits and retained legacy liabilities. This capital is backstopped by Highland Capital Management, UBS Securities, Longacre Fund Management, Southpaw Asset Management, Merrill Lynch Pierce Fenner & Smith Incorporated, and others.

The exit financing and equity rights offering backstop commitments require the approval of the United States Bankruptcy Court for the Southern District of New York. The court has set a confirmation hearing for Nov. 29. Solutia expects to emerge from bankruptcy by the end of the year.