Silicone manufacturer Momentive is proposing to extend the maturities of its senior secured debt by approximately two years. It also plans to issue $500 million in new senior secured notes due 2017, and to use the proceeds to repay a portion of the bank debt held by extending senior secured lenders. The new notes contain a collateral turnover provision that we believe materially weakens their standing vis-à-vis other first-lien lenders in a payment default. If executed as currently contemplated, the company's demonstrated access to capital markets and the improvement in its debt maturity profile would warrant a one-notch upgrade of the corporate credit rating to 'B-' from 'CCC+', once the financing is successfully completed. Based on preliminary terms and conditions,
