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Hexion Specialty Chemicals, Inc. Announces Pricing of Tender Offer For Its 8% Senior Secured Notes Due 2009

May 4, 2006 at 4:03 PM EDT

COLUMBUS, Ohio--(BUSINESS WIRE)--May 4, 2006--Hexion Specialty Chemicals, Inc. ("Hexion" or the "Company") announced today the consideration to be paid in its previously announced cash tender offer and consent solicitation for any and all of its outstanding 8% Senior Secured Notes due 2009 (the "8% Notes"). The tender offer and consent solicitation is subject to the terms and conditions set forth in Hexion's Offer to Purchase and Consent Solicitation Statement dated April 20, 2006 and the related Consent and Letter of Transmittal (the "Offer Documents").

The total consideration for the 8% Notes which will be payable in respect of 8% Notes accepted for payment that were validly tendered with consents delivered and not withdrawn on or prior to 5:00 p.m., New York City time, on May 3, 2006, will be $1,053.04 per $1,000 principal amount of 8% Notes. Hexion currently expects to accept for payment, subject to the conditions set forth in the Offer Documents, all of the validly tendered 8% Notes on Friday, May 5, 2006; accordingly, the total consideration for the 8% Notes was determined assuming payment on such date. In addition to the total consideration, which includes a consent payment of $30 per $1,000 principal amount of 8% Notes, Hexion will pay accrued and unpaid interest up to but not including the payment date for 8% Notes purchased in the Tender Offers.

The tender offers by Hexion will expire at midnight, New York City time, on May 17, 2006, unless extended or earlier terminated by Hexion (the "Expiration Date"). In the event that the Expiration Date is extended, new pricing terms may be determined. Information regarding the pricing, tender and delivery procedures and conditions to the tender offers and consent solicitations relating to the 8% Notes, the 13 1/2% Senior Subordinated Notes due 2010 and the 9 1/2% Senior Second Secured Notes due 2010, issued by Hexion and HSC Capital Corporation, is contained in the Offer Documents.

Hexion's Tender Offers are subject to the conditions set forth in the Offer Documents including, among other things, Hexion obtaining the financing necessary to pay for the Notes and consents in accordance with the terms of the tender offers and consent solicitations.

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) 538-0652 (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 8% Notes or any other securities of Hexion. It also is not a solicitation of consents to the proposed amendments to the indentures and the collateral agreements. No recommendation is made as to whether holders of the 8% Notes should tender their notes or give their consents.

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 Hexion Specialty Chemicals

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


Hexion Specialty Chemicals, Inc.
John Kompa, 614-225-2223
Peter F. Loscocco, 614-225-4127

Source: Hexion Specialty Chemicals, Inc.