Solutia Sells Assets, Plans Bank Review

  • 08 Dec 2002
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Solutia will evaluate its lead banks when the company closes the sale of its resins, additives and adhesives businesses for $500 million to UCB. The proceeds will pay down $127 million of a $300 million revolver and a $300 million term loan, said Liesl Livingston, director of investor relations for Solutia. "The revolver will still be in place, but we will evaluate whether we need the capacity and whether to stick with the lead banks," she added. "We are not looking to change banks, but every option is open to us," she said. Bank of America and Citibank lead the senior secured credit facilities for Solutia. Officials at the banks could not be reached by press time.

In the summer the two banks led an amendment that extended the line, but which led to a 400 basis points price hike to LIBOR plus 53/ 4% (LMW, 8/11). The credit was originally a five-year, $800 million revolver put in place in 1997. The term loan was carved out in the summer in order to create more liquidity for lenders. The divestiture will strengthen Solutia's balance sheet by paying down the debt, said Livingston. "The sale will reduce interest expense, beneficial to the bottom line," she added. Also, the businesses required investment that is better spent elsewhere, she said. The sale is expected to close in the next couple of months.

  • 08 Dec 2002

GlobalCapital European securitization league table

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1 Citi 3,691 11 20.70
2 Morgan Stanley 2,420 6 13.57
3 Goldman Sachs 2,096 5 11.75
4 BNP Paribas 1,686 6 9.45
5 Barclays 1,565 4 8.78

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1 Citi 40,734.72 129 11.08%
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4 Bank of America Merrill Lynch 28,936.60 91 7.87%
5 Credit Suisse 23,189.41 72 6.31%