Hexion extends tender offer for 9% and floating-rate notes

By Laura Lutz

Des Moines, Oct. 25 - Hexion Specialty Chemicals, Inc. pushed back the deadline of its tender offer and consent solicitation for its 9% notes due 2014 and floating-rate notes due 2010 to 5 p.m. ET on Nov. 13 from Nov. 8.

The tender offer applies to all of the $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 issued by Hexion U.S. Finance Corp. and Hexion Nova Scotia Finance, ULC.

The company is also soliciting consents to eliminate most of the restrictive covenants and the liens in the note indentures.

As of the consent deadline, at 5 p.m. ET on Oct. 24, the company had received tenders and consents for 100% of the principal amount of the notes.

Hexion added that 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.

Holders who tendered the notes 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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