Fixed-income officials are beginning to question whether a $200-400 million high-yield bond offering by chemical company Solutia Inc. will go forward in the first half of this year as company officials have said it will. Solutia was recently downgraded by Standard & Poor's, and one person familiar with the proposed deal says bankers are still reviewing whether they want to proceed with it, given the company's involvement in PCB-related litigation. Salomon Smith Barney andBanc of America Securities are leading the deal. Bankers at both firms either declined to comment or could not be reached.
An analyst covering the chemical company says it may have to rollover bank debt maturing in August and hope for a positive resolution in the lawsuit. Kevin Wilson, Solutia's treasurer and v.p., says the company still plans to do a deal in the first half of this year, however. He points out that even after the downgrade, the company's BB+ senior debt rating from S&P is the highest possible in high yield.