Moody's rates Polymer Holdings notes Caa2

Moody's Investors Service said it assigned a Caa2 rating to Polymer Holdings LLC's proposed senior discount notes due 2014 and affirmed the B1 rating on Kraton Polymer LLC's senior secured credit facility.

Moody's lowered the rating on Kraton's 8 1/8% senior subordinated notes to Caa1 from B3 and the senior implied rating to B2 from B1 and assigned this rating at the Polymer level. Polymer was also assigned a Caa2 senior unsecured issuer rating. The outlook remains stable.

Moody's said the downgrades consider the substantial increase in Polymer's raw material costs and their affect on cash flow support for the high level of debt that resulted from Texas Pacific Group's and J.P. Morgan Partners' (the sponsors) purchase of Kraton in December of 2003.

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