Banks Firm Price Talk on Solutia’s TL
March 5, 2010
A bank consortium that is shopping a $750 million term loan for chemical maker Solutia have set the coupon on the loan at Libor plus 350 bps, the OID at 99 and the Libor floor at 1.5%.
The banks—Deutsche Bank, Jefferies & Co., Citigroup, HSBC Securities and JPMorgan—launched the deal Thursday. The coupon on the loan leading up to the launch was between Libor plus 350 bps and Libor plus 375 bps, with a Libor floor between 1.5% and 2%. A commitment due date has been set for March 12.
The term loan will be secured by a first-priority lien on all of Solutia’s material property and assets, according to Moody’s Investors Service Analyst Bill Reed.
Jefferies early this week sold $300 million in 7.875% senior notes for Solutia, with an OID of 99.5.
Solutia plans to use the proceeds from the debt package, which also includes a $300 million revolver, in three ways: to help fund its acquisition of Etimex Solar GmbH, which supplies the film used in solar panels, to refinance its existing debt and for general corporate purposes.
Moody’s this week assigned a Ba2 rating to the term loan and revolver and a B2 rating on the notes. The company is rated B1.
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