HOUSTON, July 8 /PRNewswire-FirstCall/ -- Lyondell Chemical Company (NYSE: LYO) announced today the successful completion of its previously announced financing plan. "We're very pleased with the response of the capital markets to our plan," said Kevin DeNicola, Lyondell's senior vice president and chief financial officer. "These moves allow us to maintain ample liquidity to meet our business needs while building additional financial flexibility into our capital structure."

The financing plan consisted of three main elements: the issuance of 8,280,000 shares of Lyondell's common stock, the issuance of $278 million of senior secured notes and an amendment to the secured term loan and revolving credit facilities.

On July 1, 2002, Lyondell closed the sale of 8,280,000 shares of its common stock at $14 per share in an underwritten offering, which included the underwriters' over-allotment of 1,080,000 shares of common stock. On July 2, 2002, Lyondell closed the sale of $278 million of 10-year, 11.125% senior secured notes in an underwritten offering. The notes were priced at 99.248% to yield 11.25%, mature July 15, 2012 and are redeemable by Lyondell beginning July 15, 2007. Also on July 2, 2002, Lyondell amended its secured term loan and revolving credit facilities, making certain financial ratio requirements less restrictive. The amendment also reduced the size of the revolving credit facility to $350 million and extended the maturity of the revolving credit facility to June 30, 2005.

Lyondell used a portion of the approximately $270 million of net proceeds from the issuance of the senior secured notes to prepay approximately $200 million of its $621 million outstanding term loans under the credit facility. Lyondell retained the remaining net proceeds from the sale of the senior secured notes as well as the approximately $110 million of net proceeds from the sale of the 8,280,000 shares of its common stock for working capital and general corporate purposes. As a whole, the financing plan substantially maintains Lyondell's existing levels of liquidity and net debt.

Concurrent with the financing plan, on July 3, 2002, Lyondell completed a debt consent solicitation related to four series of its debt securities. Among other things, the consent enables Lyondell to pay up to a $0.90 cash dividend on all current and future shares of Lyondell's common stock. The consent applies to Lyondell's 9.50% Senior Secured Notes Due 2008, its 9.625% Senior Secured Notes, Series A, Due 2007, its 9.875% Senior Secured Notes, Series B, Due 2007 and its 10.875% Senior Subordinated Notes Due 2009.

Lyondell Chemical Company, (www.lyondell.com ), headquartered in Houston, Texas, is the world's largest producer of propylene oxide (PO); the world's number three supplier of TDI (toluene diisocyanate); a leading producer of propylene glycol; a leading producer of other PO derivatives such as BDO (butanediol) and PGE (propylene glycol ether); and a producer of styrene monomer and MTBE as co-products of PO production. Through its 41% interest in Equistar Chemicals, LP, Lyondell also is one of the largest producers of ethylene, propylene and polyethylene in North America and a leading producer of polypropylene, ethylene oxide, ethylene glycol, high value-added specialty polymers and polymeric powder. Through its 58.75% interest in LYONDELL-CITGO Refining LP, Lyondell is one of the largest refiners in the United States, processing extra heavy Venezuelan crude oil to produce gasoline, low sulfur diesel and jet fuel.

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SOURCE Lyondell Chemical Company
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