US chemical, fibre and polymer manufacturer Solutia, Inc. announced on 9 July that it has successfully closed its private placement of 223,000 units consisting of US$ 223 million senior secured notes …
US chemical, fibre and polymer manufacturer Solutia, Inc. announced on 9 July that it has successfully closed its private placement of 223,000 units consisting of US$ 223 million senior secured notes due 2009 as well as warrants to purchase common stock. The notes were priced at 89.992% of the principal amount and generated gross cash proceeds of approximately US$ 200 million with a coupon of 11.25% and a yield to maturity of 13.5%. Purchasers of the notes also received warrants for the purchase of 5% of Solutia common stock at a strike price of US$ 7.59 per share, representing a 10% premium over the stock“s closing price on 1 July 2002. The notes were issued by SOI Funding Corp., a special purpose entity that has placed the proceeds into escrow pending the assumption of the notes by the Company in conjunction with the successful extension of its revolving credit facility currently scheduled to expire in August 2002. Upon release of the escrowed funds, Solutia intends to use the proceeds of the offering to repay its US$ 150 million notes due 15 October 2002 and to repay a portion of its outstanding bank debt.