Hexion lifts secured notes offer to $710 million, adds $200 million junior tranche

By Paul A. Harris

Portland, Ore., Jan. 25 – Hexion Inc. announced on Wednesday that it introduced a new structure to its secured notes offering, upsizing the overall amount of bonds it is seeking to place to $710 million from $460 million.

The new structure features $200 million of senior secured notes due 2022. Those notes, which are junior to the previously announced five-year first-priority senior secured notes (Caa1/CCC+), have initial guidance of 13¾%, a trader said.

The company also upsized the Hexion 2 U.S. Finance Corp. first-priority notes tranche to $510 million from $460 million.

Yield talk on the first-priority notes remains in the 10½% area, the trader said, adding that both tranches are expected to price Wednesday.

Timing on the deal was walked back twice; it was initially expected to price on Monday.

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

The Columbus, Ohio-based producer of thermoset resins plans to use the proceeds, plus cash on its balance sheet, to purchase or redeem all of its 8 7/8% senior secured notes due 2018.

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