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Momentive says significant holder of senior notes agrees to exchange
By Jennifer Chiou
New York, Oct. 22 - Momentive Performance Materials Inc. announced that Apollo Management, LP will enter into agreements to exchange the entire amount of its holdings in several notes series concurrently with the company's tender offers.
As announced in September, Momentive Performance Materials and Hexion Specialty Chemicals, Inc. agreed to merge. Affiliates of investment firm Apollo own a controlling interest in both Hexion and Momentive, and Apollo indirectly controls Momentive through its ownership of the stock of ultimate parent company Momentive Performance Materials Holdings LLC.
Specifically, Apollo holds 33% of Momentive's 9¾% senior notes due 2014, 36% of the 9% senior notes due 2014 and 65% of the 10 1/8%/10 7/8% senior toggle notes due 2014.
Apollo also holds about 24% of Momentive Specialty Chemicals Inc.'s 9¾% second-priority senior secured notes due 2014.
The tender offers will expire at 11:59 p.m. ET on Nov. 19.
In the exchange, Apollo is set to agree to receive springing-lien dollar notes at a to-be-determined exchange ratio.
Further, Apollo will enter into a customary lock-up agreement with the initial purchasers under which it would agree to forgo selling the springing-lien notes following the offering.
Momentive Performance Materials is an Albany, N.Y.-based silicone and specialty materials company.
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