Kraton firms $1.35 billion term B at Libor plus 500 bps, changes OID

By Sara Rosenberg

New York, Dec. 16 – Kraton Polymers LLC set the spread on its $1.35 billion six-year senior secured term loan B (Ba3/B+) at Libor plus 500 basis points, the high end of the Libor plus 475 bps to 500 bps talk, and widened the original issue discount to 92 from 98, according to a market source.

The term loan still has a 1% Libor floor, 101 soft call protection for one year, a senior secured net leverage covenant and amortization of 2.5% in 2016 and 5% per annum thereafter.

Credit Suisse Securities (USA) LLC, Nomura Securities International Inc. and Deutsche Bank Securities Inc. are the leads on the deal.

Commitments to the revised deal were due on Wednesday, the source said.

Proceeds will be used to help fund the $1.37 billion acquisition of Arizona Chemical Holdings Corp. from American Securities LLC and to refinance existing debt.

Closing is expected in late 2015 or early 2016.

Kraton is a Houston-based producer of engineered polymers and styrenic block copolymers. Arizona Chemical is a biorefiner of pine chemicals with executive offices in Jacksonville, Fla., and Almere, the Netherlands.

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