S&P ups Kraton Polymers from CCC+

Standard & Poor's said it raised the corporate credit rating on Kraton Polymers LLC to B- from CCC+ and raised its first-lien term loan to B from B-. The recovery rating is unchanged at 2.

The agency also raised Kraton's senior subordinated notes to CCC from CCC- with recovery rating unchanged at 6.

S&P said the upgrade reflects the company's stronger operating performance over the past year and improved financial flexibility as a result of reduced concern regarding covenant compliance in the near-term.

The upgrade also reflects expectation that the company's credit metrics and financial profile should improve from current levels to avoid future covenant concerns particularly in light of anticipated steps in 2009, the agency said.

Ratings reflect the company's weak business risk profile derived from its narrow focus on the styrenic block copolymers market and a highly leveraged financial profile, the agency noted.

Total adjusted debt-to-EBITDA ratio is 5.2x as of Sept. 30.

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