S&P rates Kraton Polymers loan B+

Standard & Poor's said it assigned a B+ rating with a recovery rating of 2 to Kraton Polymers LLC's proposed $365 million senior secured term loan facility and affirmed Kraton's B- subordinated notes and the B+ corporate credit rating of Kraton and parent Polymer Holdings LLC. The outlook is stable.

S&P said the ratings reflect Kraton's weak business risk profile derived from its narrow focus on the styrenic block polymers market, a difficult raw-material environment and a highly leveraged financial profile.

Kraton's narrow focus is mitigated by good end use and customer diversification, which benefit earnings and cash flow; the company's strong positions in Europe and North America and its status as the only producer to offer a broad range of styrenic block polymers, the agency said.

Debt adjusted for capitalized operating leases to EBITDA is about 5.4x.

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