S&P revises Kraton view to negative, ups notes

S&P said it affirmed the B+ issuer credit rating on Kraton Corp. and revised the outlook to negative.

S&P also affirmed the BB rating on the company’s euro term loan. The recovery rating remains 1, reflecting an expectation of very high (90%-100%; rounded estimate: 95%) recovery in the event of a payment default. S&P withdrew the issue-level rating on the company's dollar-denominated term loan given it has been repaid in full.

Meanwhile, S&P said it raised the rating on the company's unsecured notes to BB- from B+ and revised the recovery rating to 2 from 4. The 2 recovery rating reflects an expectation of substantial (70%-90%; rounded estimate: 70%) recovery prospects in the event of a payment default.

This follows the company's reduction of secured debt from proceeds of the Cariflex business sale.

“A global economic recession in 2020 will hurt demand and earnings at Kraton Corp., leading to credit measures that are weaker than S&P Global Ratings' previous expectations but still appropriate for the current rating,” S&P said in a news release.

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