HOUSTON, Nov. 20 /PRNewswire-FirstCall/ -- Lyondell Chemical Company (NYSE: LYO) ("Lyondell") and its subsidiaries Equistar Chemicals, LP ("Equistar") and Equistar Funding Corporation ("Equistar Funding," together with Equistar, the "Equistar Issuers") announced today that they have commenced cash tender offers (the "Offers") for an aggregate of approximately $4.01 billion of outstanding debt securities (as listed above and collectively, "Notes") issued by Lyondell and Equistar Issuers, as applicable. More details on the Notes are provided in Table 1 below.
In conjunction with each of the Offers, Lyondell or the Equistar Issuers, as applicable, are soliciting consents (the "Consent Solicitations") from holders of the applicable series of Notes to effect certain proposed amendments (the "Proposed Amendments") to the indenture governing such series of Notes, including elimination of substantially all of the restrictive covenants. The Offers and Consent Solicitations are conducted in connection with the proposed merger of Lyondell with BIL Acquisition Holdings Limited, a Delaware corporation and wholly-owned subsidiary of Basell AF S.C.A., a Luxembourg company (the "Merger").
The Offer for each series of Notes will expire at 12:01 a.m. EST on Dec. 20, 2007, unless extended or earlier terminated by Lyondell or the Equistar Issuers, as applicable, in their sole discretion (the "Expiration Date"). The Consent Solicitation for each series of Notes will expire at or prior to 5 p.m. EST, on Dec. 5, 2007, unless extended or earlier terminated by Lyondell or the Equistar Issuers, as applicable, in their sole discretion (the "Consent Payment Deadline"). Holders may not tender their Notes without also delivering consents and may not deliver consents without also tendering their Notes. Holders that validly tender their Notes pursuant to the Offers will be deemed to have validly delivered their consents related to such Notes. Tendered Notes may not be withdrawn, and consents may not be revoked, after the Consent Payment Deadline.
The total consideration per $1,000 principal amount of the Notes validly tendered and not validly withdrawn at or prior to the Consent Payment Deadline (the "Total Consideration") will be an amount equal to:
-- the sum of
-- the present value on Dec. 20, 2007, (the "Initial Payment Date") of
the applicable Next Redemption Price on the applicable Next
Redemption Date (specified in Table 1 below), and
-- the present value on the Initial Payment Date of the amount of
interest that would accrue from the last date on which interest has
been paid until the applicable Next Redemption Date
-- minus
-- accrued and unpaid interest from the last date on which interest has
been paid up to, but not including, the Initial Payment Date.
The discount rate for calculating the present value is based on a fixed spread of 50 basis points over the yield as of 2 p.m. EST on Dec. 5, 2007, (the "Price Determination Date") of the applicable U.S. Treasury Security (the "Reference Security", specified in Table 1 below).
The Total Consideration, payable on or about the Initial Payment Date, includes a consent payment of $30 per $1,000 principal amount of the Notes to holders who validly tender the Notes, and thereby validly deliver consents related to the Notes, at or prior to the Consent Payment Deadline. Holders whose Notes are validly tendered after the Consent Payment Deadline and accepted for purchase will receive the Total Consideration minus the $30 consent payment per $1,000 principal amount of the Notes promptly after the Expiration Date. In addition, accrued and unpaid interest from the last interest payment date to, but not including, the applicable payment date will be paid on all validly tendered and accepted Notes.
Table 1 provides additional details about the Notes and summarizes the material pricing terms of the Offers for the Notes.
Table 1 - Details Regarding the Notes; Material Pricing Terms of the Tender
Offers
Lyondell's Notes
Principal
Amount Next Next
CUSIP Outstanding Security Redemption Redemption Reference
Number ($ millions) Description Date Price Security
10.500% 4.875% U.S.
Senior June 1, Treasury
552078AV9 $325 Secured 2008 $1,052.50 Note due May
Notes due 31, 2008
2013
8.000% 3.875% U.S.
552078AW7 $875 Senior Sept. 15, $1,040.00 Treasury Note
Notes due 2010 due Sept. 15,
2014 2010
8.250% 4.625% U.S.
552078AX5 $900 Senior Sept. 15, $1,041.25 Treasury
Notes due 2011 Note due Aug.
2016 31, 2011
6.875% 4.750% U.S.
552078AY3 $510 Senior June 15, $1,034.38 Treasury
Notes due 2012 Note due May
2017 31, 2012
Equistar Issuers' Notes
Principal
Amount Next Next
CUSIP Outstanding Security Redemption Redemption Reference
Number ($ millions) Description Date Price Security
10.125% 4.875% U.S.
29444NAF9 $400 Senior Sept. 1, $1,000.00 Treasury
Notes due 2008 Note due Aug.
2008 31, 2008
8.750% 4.500% U.S.
29444NAD4 $600 Notes Feb. 15, $1,000.00 Treasury
due 2009 2009 Note due Feb.
15, 2009
10.625% 4.875% U.S.
29444NAH5 $400 Senior May 1, $1,026.56 Treasury
Notes due 2008 Note
2011 due April
30, 2008
Each Offer and Consent Solicitation is made independently of the other Offers and Consent Solicitations. Lyondell and the Equistar Issuers reserve the right to terminate, withdraw or amend any Offer and Consent Solicitation, as applicable, independently of the other Offers and Consent Solicitations at any time and from time to time.
The completion of the Offers and Consent Solicitations is not a condition to completion of the Merger, but the completion of the Merger is a condition, among other things, to the obligations of Lyondell or the Equistar Issuers, as applicable, to accept and pay for the Notes pursuant to the Offers and Consent Solicitations. The complete terms and conditions of the Offers and Consent Solicitations are set forth in the Offer to Purchase and Consent Solicitation Statement dated Nov. 20, 2007, (the "Offer and Consent Statement"), which is being sent to holders of the Notes. Holders are urged to carefully read the Offer and Consent Statement and related materials.
Goldman, Sachs & Co. and Merrill Lynch & Co. are the dealer managers for the Offers and solicitation agents for the Consent Solicitations. Questions regarding the Offers and Consent Solicitations may be directed to Goldman, Sachs & Co. at (877) 686-5059 (toll-free) [(212) 357-0775 (collect)] and Merrill Lynch & Co. at (888) 654-8637 (toll-free) [(212) 449-4914 (collect)]. Copies of the Offer and Consent Statement and related materials may be obtained from the Information Agent, D. F. King & Co., Inc. at (800) 290-6429 (U.S. toll free) and (212) 269-5550 (Banks and Brokers).
This announcement is not an offer to purchase, a solicitation for acceptance of an offer to purchase, or a solicitation of consents with respect to, any securities. The Offers and Consent Solicitations are being made solely pursuant to the Offer and Consent Statement and related materials.
About Lyondell
Lyondell Chemical Company, headquartered in Houston, Texas, is North America's third-largest independent, publicly traded chemical company. Lyondell is a leading global manufacturer of chemicals and plastics, a refiner of heavy, high-sulfur crude oil and a significant producer of fuel products. Key products include ethylene, polyethylene, styrene, propylene, propylene oxide, gasoline, ultra low-sulfur diesel, MTBE and ETBE.
Forward-Looking Statements
The statements in this release relating to matters that are not historical facts are forward-looking statements. These forward-looking statements are based upon the current beliefs and expectations of management, and are subject to significant risks and uncertainties. Actual results could differ materially based on factors including, but not limited to, Lyondell's ability to implement its business strategies, including the ability of Lyondell and Basell to complete the proposed merger; availability, cost and price volatility of raw materials and utilities; supply/demand balances; industry production capacities and operating rates; uncertainties associated with the U.S. and worldwide economies; legal, tax and environmental proceedings; cyclical nature of the chemical and refining industries; operating interruptions; current and potential governmental regulatory actions; terrorist acts; international political unrest; competitive products and pricing; technological developments; risks of doing business outside of the U.S.; access to capital markets; and other risk factors. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the Lyondell, Equistar and Millennium Annual Reports on Form 10-K for the year ended December 31, 2006 and Quarterly Reports on Form 10-Q for the quarter ended September 30, 2007.
SOURCE: Lyondell Chemical Company; Equistar Chemicals, LP
CONTACT: media, David A. Harpole, +1-713-309-4125, or investors, Douglas
J. Pike, +1-713-309-7141, both of Lyondell Chemical Company
Web site: http://www.lyondell.com/
