Lyondell gets required consents for 10½% notes, 11 1/8% notes

By Jennifer Chiou

New York, May 2 - Lyondell Chemical Co. announced the receipt of consent from holders of a majority of its 10½% senior secured notes due 2013 as well as the receipt of tenders from holders of $270 million or about 97% of its $278 million of 11 1/8% senior secured notes due 2012.

Both consent solicitations ended at 5 p.m. ET on May 1.

Lyondell said it has executed supplemental indentures for both series of notes.

The company received consents to amend a restrictive provision in the indenture of the 10½% notes, which requires Lyondell to refinance debt that is subordinated in right of payment to the notes by issuing new subordinated debt.

The company will amend the indenture of the 11 1/8% notes to eliminate substantially all the restrictive covenants.

The Houston-based chemical company said it intends to fund the offer for the 11 1/8% notes with cash on hand and borrowings under its revolving credit facility.

The tender offer for the 11 1/8% notes ends at midnight ET on May 15. It began on April 18.

Lyondell said it will pay a consent payment of $2.50 for each $1,000 principal amount of 10½% notes.

For each $1,000 principal amount of 11 1/8% notes, the company said it will pay $1,066.11, which was calculated using the present value of $1,055.63, the redemption value of the notes on their first call date of July 15, 2007, plus the amount of interest that would accrue from the last date on which interest has been paid to the call date minus accrued interest from the last payment date. The discount rate is a fixed spread of 50 basis points over the yield on the 3 5/8% Treasury due June 30, 2007. The reference yield was 4.918% and the tender offer yield was 5.418%.

Those who tendered by the consent deadline will receive a consent payment of $30.00 per $1,000 principal amount of 11 1/8% notes.

The company added that it will pay accrued interest from the last interest payment date up to but excluding the payment date.

Pricing was determined at 2 p.m. ET on May 1.

Citi is the solicitation agent and dealer manager (800 558-3745 or call collect 212 723-6106). The information agent is D.F. King & Co., Inc. (800 735-3107 or call collect 212 269-5550). Consents for the 10½% notes should be sent directly to D. F. King, attention John Dunican (call collect 212 269-5694 or fax 212 809-8839).

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