Obligation Hexon Inc 8.875% ( US55336TAC99 ) en USD

Hexon Inc

100 % ⇌

Etas-Unis

US55336TAC99 ( en USD )

8.875% par an ( paiement semestriel )

15/10/2020 - Obligation échue

Prospectus brochure de l'obligation Hexion Inc US55336TAC99 en USD 8.875%, échue

2 000 USD

1 100 000 000 USD

55336TAC9

N/A

Hexion Inc. est une société mondiale de produits chimiques de spécialité produisant des résines, des adhésifs et des produits chimiques utilisés dans diverses industries, notamment l'automobile, la construction et l'aérospatiale.

L'obligation corporate, identifiée par le code ISIN US55336TAC99 et le code CUSIP 55336TAC9, émise aux États-Unis par Hexion Inc, une entreprise d'envergure mondiale spécialisée dans les produits chimiques de performance et les matériaux innovants, représentait une émission d'un montant total de 1 100 000 000 USD, libellée en USD, offrant un taux d'intérêt annuel de 8,875% payable bi-annuellement, avec une taille minimale d'achat fixée à 2 000 USD, et dont la maturité était fixée au 15 octobre 2020, date à laquelle cet instrument financier est arrivé à terme et a été intégralement remboursé à son prix nominal de 100%.

Prospectus
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424B3 1 d445786d424b3.htm PROSPECTUS
Table of Contents

Filed Pursuant to Rule 424(b)(3)
Registration No. 333-185219
PROSPECTUS

Momentive Performance Materials Inc.
Exchange Offer for
$1,100,000,000 8.875% Senior Secured Notes due 2020
and Related Guarantees

The Notes and the Guarantees

· We are offering to exchange $1,100,000,000 of our outstanding 8.875% First-Priority Senior Secured Notes due 2020 and
certain related guarantees, which were issued on October 25, 2012 and which we refer to collectively as the "initial notes,"
for a like aggregate amount of our registered 8.875% First-Priority Senior Secured Notes due 2020 and certain related

guarantees, which we refer to collectively as the "exchange notes." The exchange notes will be issued under an indenture
dated as of October 25, 2012, which we refer to as the "Indenture." We refer to the initial notes and the exchange notes
collectively as the "notes."

· The exchange notes will mature on October 15, 2020. We will pay interest on the exchange notes semi-annually on April 15

and October 15 of each year, commencing on April 15, 2013, at a rate of 8.875% per annum, to holders of record on the
April 1 or October 1 immediately preceding the interest payment date.

· The exchange notes will be guaranteed on a senior secured basis by each of our domestic subsidiaries that is a guarantor

under our senior secured credit facility (the "Note Guarantors").

· Before we enter into the asset-based revolving loan facility (the "ABL Facility") described herein, the exchange notes and
the related guarantees will be secured by first-priority pari passu liens on the collateral of the Company and the Note

Guarantors that secures their obligations under our senior secured credit facilities, subject to certain exceptions and
permitted liens.

· After we enter into the ABL Facility, the notes and the related guarantees will be secured by first-priority liens on the Notes
Priority Collateral (which generally includes most of our and our domestic subsidiaries' assets other than the ABL Priority

Collateral) and by second-priority liens on the domestic ABL Priority Collateral (which generally includes most of our and
our domestic subsidiaries' inventory and accounts receivable and related assets), in each case subject to certain exceptions
and permitted liens as described herein.

· The exchange notes and the related guarantees will rank equally in right of payment with all of our and the Note Guarantors'

senior indebtedness and senior to all of our and the Note Guarantors' subordinated indebtedness.
Terms of the Exchange Offer

· The exchange offer will expire at midnight, New York City time, at the end of January 9, 2013, unless we extend it.

· If all the conditions to this exchange offer are satisfied, we will exchange all of our initial notes that are validly tendered

and not withdrawn for the exchange notes.

· You may withdraw your tender of initial notes at any time before the expiration of this exchange offer.

· The exchange notes that we will issue you in exchange for your initial notes will be substantially identical to your initial

notes except that, unlike your initial notes, the exchange notes will have no transfer restrictions or registration rights.

· The exchange notes that we will issue you in exchange for your initial notes are new securities with no established market

for trading.
Before participating in this exchange offer, please refer to the section in this prospectus entitled "Risk Factors"
commencing on page 21.
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Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of
these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal
offense.
We have not applied, and do not intend to apply, for listing the notes on any national securities exchange or automated quotation
system.
Each broker-dealer that receives exchange notes for its own account pursuant to the exchange offer must acknowledge that it will
deliver a prospectus in connection with any resale of those exchange notes. The letter of transmittal states that by so acknowledging
and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the
Securities Act of 1933, as amended (the "Securities Act"). This prospectus, as it may be amended or supplemented from time to time,
may be used by a broker-dealer in connection with resales of exchange notes received in exchange for initial notes where those initial
notes were acquired by that broker-dealer as a result of market-making activities or other trading activities. We have agreed that, for a
period of 180 days after the expiration date, we will make this prospectus available to any broker-dealer for use in connection with
any such resale. See "Plan of Distribution."

The date of this prospectus is December 11, 2012.

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TABLE OF CONTENTS

Page
Market and Industry Data and Forecasts
iii

Prospectus Summary
1

Risk Factors
21

Cautionary Statement Concerning Forward-Looking Statements
52

Use of Proceeds
53

Capitalization
54

Covenant Compliance
56

Selected Historical Financial and Other Information
59

Management's Discussion and Analysis of Financial Condition and Results of Operations
61

Business
89

Management
101
Security Ownership of Certain Beneficial Owners and Management
129
Certain Relationships and Related Party Transactions
132
Description of Other Indebtedness
137
The Exchange Offer
146
Description of the Notes
156
Book-Entry, Delivery and Form
234
Federal Income Tax Considerations
238
Plan of Distribution
244
Legal Matters
245
Experts
245
Where You Can Find More Information
245
Index to Financial Statements
F-1

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We have not authorized anyone to give you any information or to make any representations about us or the transactions we
discuss in this prospectus other than those contained in this prospectus. If you are given any information or representations about these
matters that is not discussed in this prospectus, you must not rely on that information. This prospectus is not an offer to sell or a
solicitation of an offer to buy securities anywhere or to anyone where or to whom we are not permitted to offer or sell securities
under applicable law. The delivery of this prospectus does not, under any circumstances, mean that there has not been a change in our
affairs since the date of this prospectus. Subject to our obligation to amend or supplement this prospectus as required by law and the
rules of the Securities and Exchange Commission (the "SEC"), the information contained in this prospectus is correct only as of the
date of this prospectus, regardless of the time of delivery of this prospectus or any sale of these securities.
The notes may not be offered or sold in or into the United Kingdom by means of any document except in circumstances that do
not constitute an offer to the public within the meaning of the Public Offers of Securities Regulations 1995. All applicable provisions
of the Financial Services and Markets Act 2000 must be complied with in respect of anything done in relation to the notes in, from or
otherwise involving or having an effect in the United Kingdom.
The notes have not been and will not be qualified under the securities laws of any province or territory of Canada. The notes are
not being offered or sold, directly or indirectly, in Canada or to or for the account of any resident of Canada in contravention of the
securities laws of any province or territory thereof.
Until March 11, 2013 (90 days after the date of this prospectus), all dealers effecting transactions in the exchange notes, whether
or not participating in the exchange offer, may be required to deliver a prospectus. This is in addition to the obligation of dealers to
deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

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MARKET AND INDUSTRY DATA AND FORECASTS
This prospectus includes industry data that we obtained from periodic industry publications and internal company surveys. This
prospectus includes market share and industry data that we prepared primarily based on management's knowledge of the industry and
industry data. Unless otherwise noted, statements as to our market share and market position relative to our competitors are
approximated and based on management estimates using the above-mentioned latest-available third-party data and our internal
analysis and estimates. We determined our market share and market positions utilizing periodic industry publications. If we were
unable to obtain relevant periodic industry publications, we based our estimates on our knowledge of the size of our markets, our
sales in each of these markets and publicly available information regarding our competitors, as well as internal estimates of
competitors' sales based on discussion with our sales force and other industry participants.
Although we believe that the third-party sources are reliable, we have not independently verified market industry data provided
by third parties or by industry or general publications. Similarly, while we believe our internal estimates with respect to our industry
are reliable, our estimates have not been verified by any independent sources. While we are not aware of any misstatements regarding
any industry data presented in this prospectus, our estimates, in particular as they relate to market share and our general expectations,
involve risks and uncertainties and are subject to change based on various factors, including those discussed under sections entitled
"Risk Factors" and "Cautionary Statement Concerning Forward-Looking Statements."

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PROSPECTUS SUMMARY
This summary highlights information about Momentive Performance Materials Inc. and the notes contained elsewhere in
this prospectus. It is not complete and may not contain all the information that may be important to you. You should carefully
read the entire prospectus before making an investment decision, especially the information presented under the heading
"Risk Factors." In this prospectus, except as otherwise indicated herein, or as the context may otherwise require, all
references to (i) "MPM," the "Company," "we," "us" and "our" refer to Momentive Performance Materials Inc. and its
subsidiaries and (ii) the "MPM Group" refers to Momentive Performance Materials Holdings Inc. and its subsidiaries.
Our Company
Momentive Performance Materials Inc. was formed through the acquisition of GE Advanced Materials on December 3,
2006. We believe we are one of the world's largest producers of silicones and silicone derivatives and a global leader in the
development and manufacture of products derived from quartz and specialty ceramics. For the twelve months ended
September 30, 2012, silicones and quartz represented approximately 90% and 10% of our revenue, respectively. Silicones are a
multi-functional family of materials used in a wide variety of products, and serve as a critical ingredient in many construction,
transportation, healthcare, personal care, electronic, consumer and agricultural uses. Silicones are generally used as an additive
to a wide variety of end products in order to provide or enhance certain of their attributes, such as resistance (heat, ultraviolet
light and chemical), lubrication, adhesion or viscosity. Some of the most well-known end-use product applications include bath
and shower caulk, pressure-sensitive adhesive labels, foam products, cosmetics and tires. Due to the versatility and
high-performance characteristics of silicones, they are increasingly being used as a substitute for other materials. Our Quartz
division manufactures quartz, specialty ceramics and crystal products for use in a number of high-technology industries, which
typically require products made to precise specifications. The cost of our products typically represents a small percentage of the
overall cost of our customers' products.
On October 1, 2010, our parent, Momentive Performance Materials Holdings Inc. ("MPM Holdings") and Momentive
Specialty Chemicals Holdings LLC (formerly known as Hexion LLC and referred to herein as "MSC Holdings"), the direct parent
company of Momentive Specialty Chemicals Inc. (formerly known as Hexion Specialty Chemicals, Inc. and referred to herein as
"MSC"), became subsidiaries of a newly formed holding company, Momentive Performance Materials Holdings LLC
("Momentive Holdings"). We refer to this event as the "Momentive Combination."
As a result of the Momentive Combination, Momentive Holdings became the ultimate parent entity of MPM and MSC.
Momentive Holdings is controlled by investment funds (the "Apollo Funds") managed by affiliates of Apollo Management
Holdings, L.P. (together with Apollo Global Management, LLC and its subsidiaries, "Apollo"). Apollo may also be referred to as
the Company's owner.
We believe that our scale and global reach provide significant efficiencies in our fixed and variable cost structure and that
our breadth of related products provides significant operational, technological and commercial advantages. Our manufacturing
capacity at our internal sites and our joint venture in China is sufficient to produce the substantial majority of one of our key
intermediates, siloxane, which facilitates a low-cost operating structure and security of supply.
We are one of two producers in the silicones market with global siloxane production capacity. As of September 30, 2012,
we had 22 production sites strategically located around the world, which allows us to produce the substantial majority of our key
products locally in the Americas, Europe and Asia. Through this worldwide network of production facilities, we serve more than
5,000 customers between our Silicones and Quartz businesses in over 100 countries. Our customers include leading companies in
their respective industries, such as Procter & Gamble, 3M, Goodyear, Unilever, Saint Gobain, Motorola, L'Oreal, BASF, The
Home Depot and Lowe's.

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We believe we have created a value-added, technical service-oriented business model that enables us to target and
participate in high-margin and high-growth specialty markets. These specialty markets account for the majority of our revenues
and continue to be a growing part of our business.
Revenue and Segment EBITDA for the twelve months ended September 30, 2012 were $2,387 million and $199 million,
respectively. Net loss attributable to Momentive Performance Materials Inc. for the twelve months ended September 30, 2012
was $329 million. See "Summary Historical Consolidated Financial Data" for a reconciliation of Segment EBITDA to net loss
attributable to Momentive Performance Materials Inc.
Our Strengths
Our company has the following competitive strengths:
Leading Global Silicones Producer. We believe we are one of the world's largest producers of silicones and silicone
derivatives, with leading positions in various product lines and geographic areas. We believe our scale, global reach and breadth
of product offerings provide us with significant advantages over many of our competitors by allowing us to serve global
customers with precise specifications, particularly those expanding production in developing nations.
Attractive Industry Growth Profile. The broad molecular characteristics of silicones continually lead to new uses and
applications, which have led to worldwide industry growth in excess of GDP over the past 20 years. Drivers of growth include
end-market growth and increased market penetration, with silicones increasingly being used as a value-added substitute for
traditional materials or as a functional additive, which yields new properties for our customers' products. For instance, silicones
act as the conditioning ingredient in "2-in-1" shampoo.
Broad-Based Diversification.
Industry Diversification. Our Silicones business has a diversified revenue base across a variety of end-markets, reducing
our vulnerability to industry trends. Furthermore, our products are often used in niche applications that represent a small portion
of our customers' material costs. Our leading end-markets are building and construction, which consists of industrial and
infrastructure construction and repair, urethane foam additives, and a number of other specialty products.
Customer Diversification. We have a diverse customer base of more than 5,000 customers between our Silicones and
Quartz businesses and are well balanced across multiple geographies. In 2011, our top 20 customers accounted for less than 21%
of our total revenues, and no single customer accounted for more than 3% of our total revenues. We have maintained
long-standing relationships with many of our customers.
Geographic Diversification. We have a global sales presence, with approximately 38%, 31% and 31% of our 2011
revenues generated in the Americas, Europe and Asia, respectively, compared to 38%, 30% and 32% in 2010.
Global Infrastructure. We are a global company with significant manufacturing capacity in each of the Americas, Europe
and Asia. We have 22 production facilities located around the world, R&D centers on three continents and sales to customers in
over 100 countries. The Silicones business has three siloxane production facilities located in Waterford, New York, Ohta, Japan
and Leverkusen, Germany, as well as a siloxane manufacturing joint venture in Jiande, China, and two silanes production
facilities in Sistersville, West Virginia and Termoli, Italy. The Quartz production sites are located in Ohio, Geesthacht, Germany,
Kozuki, Japan and Wuxi, China.
We use our global platform to deliver products to companies efficiently on a worldwide basis. Many of our customers are
expanding internationally to serve developing areas in Asia, Eastern Europe, Latin America, India and Russia. Maintaining close
proximity to our international customers allows us to serve them more quickly and efficiently and thus build strong relationships.

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Attractive Intermediate Position. We produce siloxane, the key intermediate required to manufacture silicones, in the
United States, Germany and Japan, and source siloxane from a joint venture in China. This manufacturing capacity is sufficient to
meet the substantial majority of our current requirements for siloxane. We also source a portion of our requirements through
long-term and/or supply agreements. We believe this combination of siloxane supply, along with our ability to purchase siloxane
from other suppliers when pricing is advantageous, reduces our overall cost structure and strengthens our overall
competitiveness.
Leading Fused Quartz and Specialty Ceramics Producer. We believe we are a global leader in the fused quartz and
ceramics product markets in which we compete. In particular, we believe we are the largest manufacturer of quartz products for
the semiconductor end-market and the second largest manufacturer of quartz products for fiber optics. Our leadership position and
profitability are driven by several factors, including strong customer relationships and the precise quality and purity
specifications of our products. Additionally, we believe we are a leader in several ceramic materials end-markets, including
cosmetic additives.
Risk Factors
Despite our competitive strengths discussed above, investing in the notes involves a number of risks, including:

· As of September 30, 2012, on an as-adjusted basis giving effect to the Refinancing Transactions (described below
under "--Recent Developments"), we would have had $3,114 million of consolidated outstanding indebtedness. Our

substantial debt could adversely affect our operations and prevent us from satisfying our obligations under our debt
obligations. Based on interest rates as of September 30, 2012, our annualized cash interest expense is projected to be
approximately $291 million as adjusted to give effect to the Refinancing Transactions;

· If global economic conditions remain weak or further deteriorate, it will negatively impact our business, results of

operations and financial condition;

· We may be unable to achieve the cost savings or synergies that we expect to achieve from our strategic initiatives,

including the Momentive Combination, which would adversely affect our profitability and financial condition;

· Fluctuations in direct or indirect raw material costs could have an adverse impact on our business; and

· We depend on certain of our key executives and our ability to attract and retain qualified employees.
For discussion of the significant risks associated with our business, our industry and investing in the notes, you should read
the section entitled "Risk Factors."

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Organizational Structure
The chart below is a summary of the organizational structure of the Company and illustrates the long-term debt that was
outstanding as of September 30, 2012 on an as-adjusted basis giving effect to the Refinancing Transactions.

(1) Guarantor under our existing senior secured credit facilities and the contemplated ABL Facility (described below under
"--Recent Developments").
(2) The Company (excluding its subsidiaries) and the guarantors of the notes will also provide guarantees under (or will be
borrowers under) the ABL Facility.

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(3) Total estimated availability of $300 million, subject to obtaining an additional $30 million in commitments for the facility
and borrowing base availability, of which approximately $221 million would have been available as of September 30,
2012, after giving effect to $79 million of outstanding letters of credit. The ABL Facility covenants are expected to include a
fixed charge coverage ratio of 1.0 to 1.0 that will only apply if our availability is less than the greater of (a) 12.5% of the
lesser of the borrowing base and the total ABL Facility commitments at such time and (b) $30 million. Because we do not
currently meet such ratio, we do not currently expect to allow our availability under the ABL Facility to fall below such
levels.
(4) As of and for the year ended December 31, 2011, and as of and for the fiscal nine-month period ended September 30, 2012,
the Company (excluding its subsidiaries) and the Note Guarantors collectively represented 31.4% and 30.0% of our total
assets and 32.1% and 32.0% of our net sales, respectively, after intercompany eliminations.
(5) Two indirect non-U.S. subsidiaries hold interests in Momentive Performance Materials (Nantong) Co., Ltd. ("MPM
Nantong"), which, as of September 30, 2012, had approximately $30 million in long-term debt outstanding. The loan is
denominated in Chinese renminbi and collateralized by certain assets of MPM Nantong. The interest rate on the loan as of
September 30, 2012 was 6.51%. The loan is non-recourse to us and the Note Guarantors and MPM Nantong is currently an
unrestricted subsidiary under the Indenture (as defined below). MPM Nantong also has two working capital loan facilities
providing for revolving secured loans of up to $16 million (subject to exchange rates), all of which were outstanding as of
September 30, 2012. These revolving loans, which are also denominated in Chinese renminbi, must be paid down and
renewed annually. The interest rate on these loans as of September 30, 2012 was 6.89%.
(6) An indirect subsidiary owns Momentive Performance Materials (India) Private Limited, which, as of September 30, 2012,
had approximately $3 million in long-term debt outstanding.
(7) Certain of our non-U.S. subsidiaries provide guarantees under our senior secured credit facilities but do not guarantee the
notes.
(8) The 133 million of Euro-denominated notes is converted into the approximate U.S. dollar equivalent using the Company's
Euro exchange rate for the quarter ended September 30, 2012 of $1.2855 U.S. dollars per Euro.
(9) On July 19, 2012, Momentive Performance Materials Canada ULC issued a dividend of its interest in Momentive
Performance Materials Gmbh ("MPM Gmbh") to its parent, Momentive Performance Materials Worldwide Inc. ("MPM
Worldwide"), and following such dividend MPM Gmbh has been a wholly-owned direct subsidiary of MPM Worldwide.
Additional Information
MPM is a Delaware corporation, with principal executive offices located at 22 Corporate Woods Blvd., 2
nd Fl., Albany,
New York 12211. Our telephone number is (518) 533-4600. We maintain a website at www.momentive.com where general
information about our business is available. The internet address is provided for informational purposes only and is not intended
to be a hyperlink. The information contained on our website is not a part of this prospectus.
Recent Developments
ABL Facility
We intend to enter into a new $300 million asset-based revolving loan facility (the "ABL Facility") as soon as practicable
following the date of this prospectus and upon satisfaction of customary conditions, including completion of field exams and
appraisals. As of the date of this prospectus, we have received commitments from lenders for $270 million of the proposed ABL
Facility and we expect to receive the remaining $30 million in commitments, although there can be no assurance that we will
obtain such additional commitments. If we do not receive such additional commitments, our ABL Facility will be limited to a
maximum of $270 million in availability, subject to a borrowing base. The ABL Facility will replace our existing senior secured
credit facilities. While we have received commitments from lenders for $270 million of the proposed ABL Facility,

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