Hexion’s $315 million five-year secured notes guided in 9¼% area; pricing Wednesday

By Paul A. Harris

Portland, Ore., March 31 – Hexion Inc. plans to price a $315 million offering of five-year first-priority senior secured notes due 2020 (expected ratings B3/CCC+) on Wednesday, according to market sources.

Initial guidance has the deal coming with a yield in the 9¼% area, a trader said.

J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Goldman Sachs & Co., UBS Investment Bank, BofA Merrill Lynch, Credit Suisse Securities (USA) LLC and Morgan Stanley & Co. LLC are the joint bookrunners for the Rule 144A and Regulation S with registration rights offering.

Apollo is the co-manager.

The notes come with two years of call protection.

The Columbus, Ohio-based chemical company plans to use about $40 million of the proceeds to repay or redeem all of its outstanding 8 3/8% sinking fund debentures due 2016, with any remaining proceeds to be used to repay its ABL facility in full, and for general corporate purposes.

Hexion, formerly known as Momentive Specialty Chemicals Inc., provides thermoset technologies, specialty products and technical support for customers in the global wood and industrial markets.

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