Abstract
LAST MONTH, SOLUTIA SUCcessfully raised $200 million in notes due in 2009 that will pay holders a hefty 13.5%. And it secured $600 million in credit from its bankers. But, although Solutia has finally completed financial arrangements to satisfy current obligations, questions linger over its long-term ability to pay should it be held responsible in current and pending lawsuits stemming from a former polychlorinated biphenyl plant in Anniston, Ala. Chief Financial Officer Robert A. Clausen admits that today's economic climate has made this [refinancing] challenging. It has been especially challenging given Solutia's PCB obligations, which were one reason why, early last month, credit ratings agency Fitch lowered ratings on some of Solutia's secured bank debt from a fairly weak credit risk to a significantly weak risk. When Solutia was spun off from Monsanto in 1997, it indemnified Monsantotook on its financial responsibilityfor costs associated with the PCB plant that Monsanto ...
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