S&P rates Kraton loan BB+, notes BB-

Standard & Poor's said that it raised the corporate credit rating on Kraton Polymers LLC to BB- from B+ and removed the ratings from CreditWatch, where they were placed on Nov. 15 with positive implications.

The outlook is stable.

S&P said it assigned the proposed $350 million in senior secured facilities, which consists of a $150 million revolving credit facility and a $200 million term loan A facility, a BB+ issue-level rating with a 1 recovery rating, indicating the expectation for a very high (90%-100%) recovery in the event of a payment default.

S&P also assigned the proposed $200 million in senior unsecured notes a BB- issue level rating with a 4 recovery rating, indicating the expectation for an average (30%-50%) recovery in the event of a payment default.

The $400 million in proceeds from the proposed $200 million term loan A facility and $200 million in notes will pay off existing debt of about $383 million with the remainder applied toward transaction fees and expenses.

The upgrade reflects the expectation that favorable business conditions and operating trends in the near to intermediate term will continue to support adequate cash flow generation and liquidity, the agency said.

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