S&P ups Kraton, rates loans BB

S&P said it raised its corporate credit rating on Kraton Corp. and Kraton Polymers LLC to B+ from B. The outlook is stable.

At the same time, the agency assigned its BB issue-level rating and 1 recovery rating (90%-100%; rounded estimate 95%) to the company's proposed first-lien $335 million term loan issued by Kraton Polymers, and the proposed €285 million first-lien term loan issued by Kraton Polymers Holding BV.

Proceeds will be used to repay the company's existing $520 million and €260 million first-lien term loans.

S&P also raised the issue-level rating to BB from BB- on the company's existing $520 million first-lien term loan and the €260 million first-lien term loan. The recovery rating remains 1, indicating expectations for very high recovery (90%-95%; rounded estimate: 95%).

In addition, the agency raised the issue-level rating on the company's existing $440 million and $400 million senior notes to B+ from B- and revised the recovery rating to 4 from 5, indicating average recovery (30%-50%; rounded estimate: 30%).

“The upgrade reflects our anticipation that operating performance in 2018 will at least be on par with the strong 2017 operating performance,” S&P said in a news release.

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