Kraton Performance’s $1.78 billion debt backing Arizona Chemicals buy to include bonds, loans

By Paul A. Harris

Portland, Ore., Sept. 28 – Kraton Performance Polymers, Inc. plans to put in place $1.78 billion of long-term debt to help finance its acquisition of all of the capital stock of privately held Arizona Chemical Holdings Corp. for a cash purchase price of $1.37 billion, according to a Monday press release from Kraton Performance.

The financing will take the shape of $1.35 billion of covenant-light term loans, with the balance to be comprised of senior unsecured notes, the release stated.

The debt commitment comes from Credit Suisse Securities (USA) LLC, Nomura Securities International Inc. and Deutsche Bank Securities Inc.

In addition, Kraton plans to put in place a $250 million asset-based revolving credit facility, which is expected to be largely undrawn.

Net leverage at the closing of the acquisition will be approximately 4.6 times.

That leverage is expected to fall to 3 times by the end of 2017, Stephen E. Tremblay, Kraton’s executive vice president and chief financial officer, stated in Monday’s press release.

The acquisition is subject to regulatory and other customary approvals and conditions and is expected to close in late 2015 or early 2016.

Kraton is a Houston-based producer of engineered polymers and styrenic block copolymers.

Arizona Chemical is a Jacksonville, Fla.-based specialty chemicals company.

© 2015 Prospect News.
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