Solutia Inc. has closed on a new revolving credit facility effective immediately. The new three-year, $350 million credit facility is led by Ableco Finance LLC, a unit of Cerberus Capital Management L.P., and other syndicate lenders, Wells Fargo Foothill, and Congress Financial Corp.

The proceeds of this facility have been partially used to retire Solutia's former bank credit facility. Solutia also announced that it and Astaris LLC, its 50/50 joint venture with FMC Corporation, have amended Astaris' credit agreement with Astaris' bank lenders so as to remove security interests in certain Solutia assets and to replace those interests with a $67 million letter of credit, issued under Solutia's new credit facility. The letter of credit will reduce dollar for dollar as future keepwell payments to Astaris

are made.

Solutia estimates its 2004 pro-forma annual interest expense will be approximately $120 million. At quarter end, the company's pro-forma liquidity taking into consideration the impact of the new credit facility, i.e., posting of the $67 million Astaris letter of credit and fees, was approximately $150 million.