Solutia Completes Refinancing of Senior Secured Term Loan

Mar 03, 2011, 16:15 ET from Solutia Inc.

ST. LOUIS, March 3, 2011 /PRNewswire/ -- Solutia Inc. (NYSE: SOA), a market-leading performance materials and specialty chemicals company, today announced that it has completed the refinancing of its existing senior secured term loan and paid down an additional $18 million of debt in conjunction with the refinancing.  Over the past year, Solutia has repaid $150 million of its initial $850 million senior secured term loan.  

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The refinancing includes a new $700 million senior secured term loan facility due August 1, 2017.  The loan was issued at par and has initial pricing of LIBOR plus 2.75 percent (with a leverage-based step-down to 2.50 percent) and a 0.75 percent LIBOR floor, for a current yield of 3.50 percent versus 4.50 percent under the initial term loan.  At today's interest rates, this pricing would reduce Solutia's annual interest expense by approximately $7 million.  As part of the refinancing, the Company also modified other terms of the agreement to improve strategic and financial flexibility, including moving to a single senior secured leverage covenant.

"This refinancing, coupled with the recent ratings upgrade from Standard & Poor's Ratings Services, is a reflection of the significant progress we have made in deleveraging the Company," said James M. Sullivan, Executive Vice President and Chief Financial Officer.  "As previously outlined, we plan to continue to strengthen the balance sheet and credit ratings over time."  

Related to this refinancing, the Company will incur approximately $6 million of charges in the first quarter, which is primarily the write-off of the original issue discount on the initial $850 million term loan.

Deutsche Bank Securities Inc. acted as sole lead arranger and bookrunner on the refinancing.

Notes to Editor:  SOLUTIA and the Radiance Logo™ and all other trademarks listed below are trademarks of Solutia Inc. and/or its affiliates.

Forward-Looking Statements

This press release may contain forward-looking statements, which can be identified by the use of words such as "believes," "expects," "may," "will," "intends," "plans," "estimates" or "anticipates," or other comparable terminology, or by discussions of strategy, plans or intentions.  These statements are based on management's current expectations and assumptions about the industries in which Solutia operates.  Forward-looking statements are not guarantees of future performance and are subject to significant risks and uncertainties that may cause actual results or achievements to be materially different from the future results or achievements expressed or implied by the forward-looking statements.  These risks and uncertainties include, but are not limited to, those risk and uncertainties described in Solutia's most recent Annual Report on Form 10-K, including under "Cautionary Statement About Forward Looking Statements" and "Risk Factors", and Solutia's quarterly reports on Form 10-Q.  These reports can be accessed through the "Investors" section of Solutia's website at .  Solutia disclaims any intent or obligation to update or revise any forward-looking statements in response to new information, unforeseen events, changed circumstances or any other occurrence.

Corporate Profile

Solutia is a market-leading performance materials and specialty chemicals company. The company focuses on providing solutions for a better life through a range of products, including: Saflex® polyvinyl butyral interlayers for glass lamination and for photovoltaic module encapsulation and VISTASOLAR® ethylene vinyl acetate films for photovoltaic module encapsulation;  LLumar®, Vista™, EnerLogic™, FormulaOne®, Gila®, V-KOOL®, Huper Optik®, IQue™, Sun-X® and Nanolux™ aftermarket performance films for automotive and architectural applications; Flexvue™ advanced film component solutions for solar and electronic technologies; and technical specialties products including Crystex® insoluble sulfur, Santoflex® PPD antidegradants, Therminol® heat transfer fluids and Skydrol® aviation hydraulic fluids. Solutia's businesses are world leaders in each of their market segments. With its headquarters in St. Louis, Missouri, USA, the company operates globally with approximately 3,300 employees in more than 50 worldwide locations. More information is available at .

SOURCE Solutia Inc.