Hexion Specialty Chemicals, Inc. Announces the Amendment of Its Senior Secured Credit Facility, the Issuance of New Notes and Acceptance of All Notes Tendered Pursuant to Its Tender Offers
COLUMBUS, Ohio--(BUSINESS WIRE)--Hexion Specialty Chemicals, Inc. ("Hexion" or the "Company") announced today that it has amended its senior secured credit facility pursuant to an amendment and restatement of the credit agreement governing this credit facility. The amended and restated credit agreement provides that the Company's current seven-year $1,625 million term loan facility will remain outstanding and also provides for $375 million additional seven-year term loans, with the term of such facility beginning in May 2006. The amended and restated credit agreement also provides that the Company's current seven-year $50 million synthetic letter of credit facility will remain outstanding, with the term of such facility beginning in May 2006. The Company continues to have access to the $225 million revolving credit facility.
The Company has also through its wholly owned finance subsidiaries, Hexion U.S. Finance Corp. and Hexion Nova Scotia Finance, ULC, sold $200 million of Second-Priority Senior Secured Floating Rate Notes due 2014 and $625 million of 9 3/4% Second-Priority Senior Secured Notes due 2014 (together the "New Notes").
The Company also announced today that it has exercised its right to accept for early payment all its outstanding Second-Priority Senior Secured Floating Rate Notes due 2010 (CUSIP No. 07329WAA6) (the "2005 Floating Rate Notes"), Second-Priority Senior Secured Floating Rate Notes due 2010 (CUSIP No. 428303AA9) (the "2004 Floating Rate Notes") and 9% Second-Priority Senior Secured Notes due 2014 (the "9% Notes" and collectively with the 2005 Floating Rate Notes and the 2004 Floating Rate Notes, the "Notes") tendered by 9:00 a.m. New York City time, on November 3, 2006. Pursuant to the terms of the Offer to Purchase and Consent Solicitation Statement dated October 12, 2006 and the related Consent and Letter of Transmittal (the "Offer Documents"), the Company has accepted for purchase and paid for the entire principal amount of the outstanding $150 million principal amount of its 2005 Floating Rate Notes, the entire principal amount of the outstanding $150 million principal amount of its 2004 Floating Rate Notes and the entire principal amount of the outstanding $325 million principal amount of its 9% Notes.
In connection with the tender offers for the Notes, Hexion received the required consents with respect to the Notes to eliminate substantially all of the restrictive covenants and certain events of default included in the Indentures under which such Notes were issued. As a result, the consent condition has been satisfied with respect to the Notes. In addition, Hexion also announced that all conditions, including obtaining the financing to pay for the Notes and consents in accordance with the terms of the Offer Documents, have been satisfied. Accordingly, the supplemental indentures relating to the Notes containing the proposed amendments were executed by Hexion and the Trustee under the respective Indentures and became operative upon Hexion's acceptance for purchase of the Notes tendered to date. In addition, in connection with the tender offers, Hexion solicited the consent of the holders of the 2005 Floating Rate Notes, the 2004 Floating Rate Notes and the 9% Notes to terminate all of the security interests securing the obligations under such Notes. All such security interests were terminated immediately after the acceptance for purchase of the 2005 Floating Rate Notes, the 2004 Floating Rate Notes and the 9% Notes by Hexion.
Notwithstanding Hexion's exercise of its early acceptance rights, the Tender Offers will remain open until 5:00 pm, New York City time, on November 13, 2006, unless extended by Hexion.
Hexion has retained Credit Suisse Securities (USA) LLC to act as Dealer Manager in connection with the tender offers and consent solicitations. Questions about the tender offers and consent solicitations may be directed to Credit Suisse Securities (USA) LLC at (800) 820-1653 (toll free) or (212) 325-7596 (collect). Copies of the Offer Documents and other related documents may be obtained from D.F. King & Co., Inc., the information agent for the tender offers and consent solicitations, at (800) 290-6426 (toll free) or (212) 269-5550 (collect).
The tender offers and consent solicitations are being made solely by means of the Offer Documents. Under no circumstances shall this press release constitute an offer to purchase or the solicitation of an offer to sell the Notes or any other securities of Hexion. No recommendation is made as to whether holders of the Notes should tender their Notes.
The New Notes will not be and have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. The information contained in this press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of any of the securities referred to herein in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any state.
Forward Looking Statements
Certain statements in this press release are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Forward looking statements may be identified by the words "believe," "expect," "anticipate," "project," "plan," "estimate," "will" or "intend" and similar expressions. The forward-looking statements contained herein reflect our current views with respect to future events and are based on our currently available financial, economic and competitive data and on current business plans. Actual results could vary materially depending on risks and uncertainties that may affect the Company's operations, markets, services, prices and other factors as discussed in our SEC filings. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to: economic factors such as an interruption in the supply of or increased pricing of raw materials due to natural disasters, competitive factors such as pricing actions by our competitors that could affect our operating margins, and regulatory factors such as changes in governmental regulations involving our products that lead to environmental and legal matters as described in our SEC filings. Additional factors that could cause actual results to differ materially from those in the forward-looking statements are discussed in our Form 10-K for the period ended December 31, 2005 under the caption "Forward-Looking and Cautionary Statements" under Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operations. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as otherwise required by law.
About the Company
Based in Columbus, Ohio, Hexion Specialty Chemicals combines the former Borden Chemical, Bakelite, Resolution Performance Products and Resolution Specialty Materials companies into the global leader in thermoset resins. Hexion serves the global wood and industrial markets through a broad range of thermoset technologies, specialty products and technical support for customers in a diverse range of applications and industries. Hexion Specialty Chemicals is owned by an affiliate of Apollo Management, L.P. Additional information is available at www.hexion.com
Hexion Specialty Chemicals, Inc.
John Kompa, +1-614-225-2223
Director, Investor Relations
Peter F. Loscocco, +1-614-225-4127
Vice President, Public Affairs
Source: Hexion Specialty Chemicals, Inc.