Solutia completes re-pricing of debtor-in-possession financing

Solutia Inc. has reached agreement with its lenders to amend its debtor-in-possession (DIP) financing, pending approval by the US Bankruptcy Court, the manufacturer of performance films said on 2 June…

Solutia Inc. has reached agreement with its lenders to amend its debtor-in-possession (DIP) financing, pending approval by the US Bankruptcy Court, the manufacturer of performance films said on 2 June 2005. The amendment reduces Solutia“s term loan borrowing rate by approximately 250 basis points and lowers its interest costs by up to USD 7 million, depending on the length of Solutia“s Chapter 11 case. In addition, the amendment provides for a six-month extension through 19 June 2006, and makes other minor modifications. The amount of the financing remains USD 525 million and Citigroup Global Markets Inc. acted as lead arranger. “Our ability to improve pricing of the DIP facility is a testament to the growing confidence in Solutia“s reorganization progress and our significantly improved business performance,” said James M. Sullivan, senior vice president and CFO, Solutia Inc. “In addition, while we may not ultimately need the extension, it gives us greater flexibility should we require more time to achieve the optimal resolution to our Chapter 11 case.” Solutia intends to promptly seek approval of the matter in the US Bankruptcy Court for the Southern District of New York.