Citigroup launched syndication of a $400 million increase for Solutia's debtor-in-possession financing at a bank meeting last Thursday. The revolver is being increased from $175 million to $250 million and the term loan "B" is being increased to $975 million from $650 million. The credit's tenor is also being extended one year to March 2008. Pricing remains the same at LIBOR plus 2 1/4% for the revolver and LIBOR plus 3 1/2% for the term loan, according to a banker. The credit also has the option to increase funds by another $150 million.
The St. Louis-based company will use the proceeds to acquire the remaining 50% stake in Flexsys, a 50/50 rubber chemicals joint venture with Japan-based Akzo Nobel. The exact transaction amount could not be determined. Solutia originally filed for bankruptcy in December 2003 and received its initial $525 million DIP from Citigroup in January 2004. The company cut 250 basis points off the term loan in June 2005 and another 75 basis points off it last March when it also increased the size of the loan to $825 million and extended the tenor by a year.
The company does not currently have any plans to extend or increase the DIP again, according to a Solutia spokesman.
Solutia owns product lines in areas such as films for glass products, specialty products, and carpet, nylon and fibers for use in the automotive and architectural industries.