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Hexion tenders for two series of floaters due 2010, 9% notes
By Jennifer Chiou
New York, Oct. 12 - Hexion Specialty Chemicals, Inc. announced the launch of a tender offer for any and all of its $150 million principal amount at maturity of second-priority senior secured floating-rate notes due 2010 issued in 2004, $150 million principal amount at maturity of second-priority senior secured floating-rate notes due 2010 issued in 2005 and $325 million principal amount at maturity of 9% second-priority senior secured notes due 2014.
The notes were issued by Hexion U.S. Finance Corp. and Hexion Nova Scotia Finance, ULC.
The company said it also is also soliciting consents to eliminate most of the restrictive covenants and the liens in the note indentures.
The consent deadline is Oct. 24. The offer ends at midnight ET on Nov. 8.
Hexion added it expects to enter into a new $2 billion term loan facility and a new $50 million synthetic letter of credit facility, which will replace its May 2006 term loan and synthetic letter of credit facilities.
For each $1,000 principal amount of the 2005 floaters, the company will pay $1,023.
For each $1,000 principal amount of the 2004 floaters, the company will pay $1,022.50.
The total consideration for the 9% notes will be determined on the basis of a yield to the first redemption date equal to the sum of the yield of the 3.625% Treasury due July 15, 2009 and a fixed spread of 50 basis points.
Hexion said it will pay accrued interest up to, but not including, the payment date.
Those who tender by the consent deadline will also receive the $30.00 per $1,000 principal amount consent payment, which is already included in the payout.
Credit Suisse Securities (USA) LLC is the dealer manager (800 820-1653 or call collect 212 325-7596). D.F. King & Co., Inc. is the information agent (800 290-6426 or call collect 212 269-5550).
Based in Columbus, Ohio, Hexion is focused on thermoset resin technologies.
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