Hexion extends tender offers for Hexion, Huntsman notes to Nov. 17

By Angela McDaniels

Tacoma, Wash., Nov. 6 - Hexion Specialty Chemicals, Inc. extended its tender offers and consent solicitations for some of its notes and those of Huntsman International LLC to midnight ET on Nov. 17 from Nov. 5.

The offers began on Oct. 8 in connection with Hexion's upcoming merger with Huntsman Corp. They are being made through Hexion's subsidiary, Nimbus Merger Sub Inc., and cover any and all of the following:

• Hexion U.S. Finance Corp. and Hexion Nova Scotia Finance, ULC's $200 million second-priority senior secured floating-rate notes due 2014;

• Hexion U.S. Finance and Hexion Nova Scotia Finance's $625 million 9¾% second-priority senior secured notes due 2014;

• Huntsman's $296.01 million 11 5/8% senior secured notes due 2010;

• Huntsman's $198 million 11½% senior notes due 2012;

• Huntsman's $175 million 7 3/8% senior subordinated notes due 2015;

• Huntsman's €135 million 7½% senior subordinated notes due 2015;

• Huntsman's $347 million 7 7/8% subordinated notes due 2014; and

• Huntsman's €400 million 6 7/8% subordinated notes due 2013.

The company announced the payouts for the notes on Oct. 24. At the time, the amounts assumed a Nov. 6 payment date.

For each $1,000 principal amount, the payouts were reported as:

• $1,021.49 for Hexion's floaters, which was calculated using a yield to the notes' first call date based on the yield on the 4¾% U.S. Treasury note due Nov. 15, 2008 plus 50 basis points;

• $1,203.40 for Hexion's 9¾% notes, which was calculated using a yield to the notes' first call date based on the yield on the 4½% U.S. Treasury note due Nov. 15, 2010 plus 50 bps;

• $1,034.06 for Huntsman's 11 5/8% notes;

• $1,062.50 for Huntsman's 11½% notes;

• $1,096.64 for Huntsman's 7 3/8% notes, which was calculated using a yield to the notes' first call date based on the yield on the 3¼% U.S. Treasury note due Dec. 31, 2009 plus 50 bps;

• €1,083.97 for Huntsman's 7½% notes, which was calculated using a yield to the notes' first call date based on the yield on the 5 3/8% German Bund due Jan. 4, 2010 plus 50 bps;

• $1,157.27 for Huntsman's 7 7/8% notes, which was calculated using a yield to the notes' first call date based on the yield on the 4½% U.S. Treasury note due Nov. 15, 2010 plus 50 bps; and

• €1,086.30 for Huntsman's 6 7/8% notes, which was calculated using a yield to the notes' first call date based on the yield on the 5 3/8% German Bund due Jan. 4, 2010 plus 50 bps.

The total amounts include a consent payment of $15.00 per $1,000 or €15.00 per €1,000 that will only be paid to holders who tendered with consents by the consent date of Oct. 22. Holders who tender are required to deliver consents.

Nimbus will also pay accrued interest up to but excluding the payment date.

In addition to the tender offers, Nimbus is soliciting consents to eliminate most of the restrictive covenants and the liens, as applicable, in the note indentures.

Hexion announced on Oct. 23 that it had received the consents needed to amend the indentures and that it executed supplemental indentures for the notes.

As of 5 p.m. ET on Nov. 5, the company had received tenders from holders of 93.56% of the floaters, 99.99% of the 9¾% notes, 97.10% of the 11 5/8% notes, 99.53% of the 11½% notes, 100% of the 7 3/8% notes, 99.83% of the 7½% notes, 97.99% of the 7 7/8% notes and 98.43% of the 6 7/8% notes.

As previously reported, the tender offers are subject to conditions that include completion of Hexion's proposed acquisition of Huntsman and the related financing transactions and the receipt of consents for a majority of the notes issued under each indenture.

The release of liens under the indentures requires consents for two-thirds of the notes for Hexion's debt and all noteholders for Huntsman's 11 5/8% notes.

Hexion previously said it expects its 9.2% debentures due 2021, 7 7/8% debentures due 2023 and 8 3/8% sinking fund debentures due 2016 to remain outstanding.

Oppenheimer & Co. Inc. (800 274-2746 or 212 885-4646) is dealer manager, and D.F. King & Co., Inc. (800 290-6426 or 212 269-5550) is information agent.

Hexion is a Columbus, Ohio, maker of thermoset and specialty products for wood and industrial markets. It is controlled by an affiliate of Apollo Management, LP.

Huntsman is a Salt Lake City manufacturer of differentiated chemicals and pigments.

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