Banks Tighten Solutia’s OID at Last Minute
March 12, 2010
A bank consortium shopping a $750 million term loan for Solutia on Thursday tightened the loan's OID to 99.5 from 99 in the hours approaching the 5 p.m. commitment deadline.
The banks—Deutsche Bank, Jefferies, Citigroup, HSBC and JPMorgan—launched the deal on March 4, pricing the loan at Libor plus 350 bps, with a 1.5% Libor floor.
Price talk 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 was originally set for today but was moved up due to the strong reception the loan received.
The term loan is secured by a first-priority lien on all of Solutia’s material property and assets, according to Moody’s Investors Service analyst Bill Reed.
Last week, Jefferies sold $300 million in 7.875% senior notes for Solutia, with an OID of 99.5.
The St. Louis-based chemical maker 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.
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