Moody's rates Kraton loan Ba3, notes B2

Moody's Investors Service said it assigned Kraton Performance Polymers, Inc.'s proposed credit facility consisting of a $200 million term loan and $150 million revolver a Ba3 (LGD3, 35%) rating and its proposed $200 million of notes due 2019 a B2 (LGD5, 75%) rating.

Moody's said it affirmed the B1 corporate family rating, Ba3 (LGD3, 35% from 31%) senior secured revolver and term loan and B3 (LGD6, 97% from LGD5, 82%) senior subordinated global notes and changed the outlook to positive from stable.

Proceeds from the proposed facility and notes will be used to redeem the outstanding credit facility and subordinated notes.

The outlook revision was a result of the improved operating performance over 2010 along with the prospect of continued favorable results, Moody' said.

Kraton's ratings incorporate the expectations that leverage will remain below 3.0 times, margins will remain elevated and cash flow metrics will remain strong, the agency said.

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