Moody’s assigns Kraton notes B2

Moody’s Investors Service said it assigned a B2 rating to the new dollar-denominated senior unsecured notes to be issued by Kraton Polymers LLC, guaranteed by B1-rated Kraton Corp.

“The B2 rating, which is one notch below Kraton’s corporate family rating, reflects the senior unsecured nature of the new U.S. dollar notes and their effective subordination to the company’s existing secured indebtedness, including ABL revolving credit facility and senior secured euro term loan,” Moody’s said in a press release.

With the proceeds, Kraton plans to refinance its $395 million of 7% senior unsecured notes due April 2025. Kraton’s proposed transaction will be about net debt leverage neutral, as almost all the proceeds will be used to repay the 7% notes, the agency said.

Kraton’s annual interest payments should also be lower since the new notes will likely have a lower coupon than the 7% notes, Moody’s said.

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