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Tenneco Announces Bank Agreements to Facilitate Tax-Free Spin-Off

1 October 1999

Tenneco Announces Bank Agreements to Facilitate Tax-Free Spin-Off of Tenneco Packaging and Separation Into Two Companies

    GREENWICH, Conn.--Sept. 30, 1999--Tenneco Inc. today announced it has signed bank agreements for $2.55 billion of financing related to the announced tax-free spin-off of Tenneco Packaging. The new bank financings include $1.55 billion of Tenneco Automotive credit facilities and a $1 billion Tenneco Packaging credit facility. The tax-free spin-off is expected to be completed in November and will result in the separation of Tenneco Packaging and Tenneco Automotive into two stand-alone public companies.
    The credit facilities will be drawn upon to retire existing Tenneco Inc. debt and preferred stock. In addition, the remainder available under these facilities will provide the newly separated companies capacity to finance future working capital and other corporate requirements.
    Tenneco announced in April 1999 that its Board of Directors had approved the separation of its automotive and packaging businesses through a tax-free spin-off of its packaging business to Tenneco shareowners. In June, the company said that it would sell its remaining interest in Packaging Corporation of America, and in August, Tenneco received a private letter ruling from the Internal Revenue Service that the planned spin-off of Tenneco Packaging will be tax free to Tenneco and its shareowners.
    The $1.55 billion Tenneco Automotive syndicated credit facility was arranged by Chase Securities Inc. Citicorp USA Inc. is syndication agent; Commerzbank and Bank of America N.A. are co-documentation agents.
    The $1 billion of Tenneco Packaging bank facilities was arranged by Banc of America Securities LLC. Bank of America N.A. is administrative agent. Credit Suisse First Boston is syndication agent; Bank One, NA and Banque National De Paris are co-documentation agents.
    Tenneco is a $6 billion manufacturing company headquartered in Greenwich, Conn., with 38,000 employees worldwide. Tenneco Automotive is one of the world's largest producers and marketers of ride control and exhaust systems and products, which are sold under the Monroe(R) and Walker(R) global brand names. Among its products are Sensa-Trac(R) shocks and struts, Rancho(R) shock absorbers, Walker(R) Quiet-Flow(TM) mufflers and DynoMax(TM) performance exhaust products, and Monroe(R) Clevite(TM) vibration control components. Tenneco Packaging is among the world's leading and most diversified packaging companies. Among its products are Hefty(R) trash bags, Hefty OneZip(R) and Baggies(R) food storage bags, E-Z Foil(R) single-use aluminum cookware and Hexacomb(R) paper honeycomb products.

    Several statements in this press release are forward looking and are identified by the use of forward looking words and phrases, such as "will," "would," and "expected." These forward looking statements are based on the current expectations of the Company (including its subsidiaries). Because forward looking statements involve risks and uncertainties, the Company's plans, actions and actual results could differ materially. Among the factors that could cause plans, actions and results to differ materially from current expectations are: (i) the general political, economic and competitive conditions in markets and countries where the Company and its subsidiaries operate, including currency fluctuations and other risks associated with operating in foreign countries; (ii) governmental actions, including the ability to receive regulatory approvals and the timing of such approvals; (iii) change in capital availability or costs; (iv) results of analysis regarding plans and strategic alternatives; (v) changes in consumer demand and prices, including decreases in demand for the Company's products and the resulting negative impact on its revenues and margins from such products; (vi) the cost of compliance with changes in regulations, including environmental regulations; (vii) workforce factors such as strikes or labor interruptions; (viii) material substitutions and increases in the costs of raw materials; (ix) the ability of the Company and its subsidiaries to integrate operations of acquired businesses quickly and in a cost-effective manner; (x) new technologies; (xi) the ability of the Company, its subsidiaries and those with whom they conduct business to timely resolve the Year 2000 issue (relating to potential equipment and computer failures by or at the change of the century), unanticipated costs of, problems with, or delays in resolving the Year 2000 issue, and the costs and impacts if the Year 2000 issue is not timely resolved; (xii) changes by the Financing Accounting Standards Board or other accounting regulatory bodies of authoritative generally accepted accounting principles or policies; and (xiii) the timing and occurrence (or non-occurrence) of transactions and events which may be subject to circumstances beyond the control of the Company and its subsidiaries.