Moody's upgrades Kraton Polymers, rates loan B1

Moody's Investors Service said it assigned a B1 rating to Kraton Polymers LLC's proposed senior secured $365 million term loan due 2013 and upgraded the company's corporate credit rating to B1 from B2 and $200 million senior subordinated notes due 2014 to B3 from Caa1. The outlook is stable.

Proceeds from the new term loan will be used to refinance the 12% senior discount notes due 2014 currently at parent holding company Polymer Holdings LLC and Kraton's existing $263 million guaranteed senior secured term loan due 2010.

The upgrade B1 reflects management's demonstrated ability to generate growth in revenues and improved cash flow. Moody's said it believes that new management has been effective in 2005 in a number of initiatives including improving product prices, reducing inventory, cutting costs and improving operations.

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