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Hexion seeks OK to enter commitments for $2 billion in new debt
By Caroline Salls
Pittsburgh, May 30 – Hexion Inc. requested court approval to enter into commitment and fee letters for a total of about $2 billion in new asset-based credit facility and term loan debt and senior unsecured notes, according to a motion filed Thursday with the U.S. Bankruptcy Court for the District of Delaware.
Hexion said solicitation of votes on its plan of reorganization is underway, and the company is “on the precipice of confirming a plan that has overwhelming support at every level of the debtors’ capital structure, maximizes recoveries to all of the debtors’ creditors and substantially de-levers the debtors’ balance sheet.”
Under the plan, Hexion said the reorganized debtors intend to borrow under the new $350 million ABL and $1.2 billion term loan and issue $450 million in senior unsecured notes, which will give the reorganized debtors roughly $2 billion in debt financing upon emergence.
The company said these borrowings are necessary to fund plan distributions, repay the company’s debtor-in-possession facilities and allow the debtors to emerge from Chapter 11 with sufficient post-emergence liquidity.
JPMorgan Chase Bank is the agent for the five-year ABL facility and the term loan facility.
A hearing is scheduled for June 7.
Hexion, a Columbus, Ohio-based chemical company, filed bankruptcy on April 1. The Chapter 11 case number is 19-10684.
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