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Hexion Specialty Chemicals, Inc. Announces Bank Funding Of $325 Million Merger Termination Fee


Borrowing by parent Hexion, LLC will not affect company’s cash flow or debt covenants

COLUMBUS, Ohio .- Hexion Specialty Chemicals, Inc. today announced that Credit Suisse and Deutsche Bank (the “Banks”) have funded to its parent company, Hexion LLC, funds to fully cover payment of the $325 million termination fee associated with Hexion Specialty Chemicals’ terminated merger agreement with Huntsman Corporation. Hexion plans to promptly convey the termination fee to Huntsman Corporation.

The six-year loan to Hexion, LLC has a Payment in Kind (PIK) provision that enables Hexion LLC, at its option, to accrue the interest at intervals during the term of the loan in lieu of paying cash interest payments. Because the borrowing was made by Hexion LLC, it will not impact the cash flow or debt covenant compliance calculations of Hexion Specialty Chemicals.

“We are pleased that the Banks have provided this funding as outlined in their commitment letters, so that we in turn can fulfill our termination fee commitment to Huntsman Corporation as outlined in the merger agreement,” said Craig O. Morrison, Chairman and CEO of Hexion. “This continues the string of recent positive developments that includes settlement with Huntsman Corporation of all litigation and a $200 million investment commitment to Hexion by affiliates of our owners, Apollo Management. This incremental investment in Hexion will help strengthen our strong competitive position in a difficult economic environment.”


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