Moody's ups Kraton, rates loan Ba3

Moody's Investors Service said it upgraded Kraton Corp.'s corporate family rating to Ba3 from B1, and its probability of default rating to Ba3-PD from B1-PD. The agency also assigned Ba3 to the company's planned $950 million first-lien term loan facilities. Kraton Polymers Holdings BV will be co-issuer on the term loan. Kraton's speculative grade liquidity rating remains SGL-2.

The proceeds of the new first-lien term loan facilities, together with DL Chemical Co., Ltd.'s equity injection, will be used to fund the acquisition of Kraton by DL Chemical and repay Kraton’s subsidiaries’ debt. The ratings on Kraton's subsidiaries’ term loan and senior unsecured notes will be withdrawn upon redemption

“The upgrade of Kraton's CFR to Ba3 reflects the company's improved earnings, sound free cash flows and a moderately leveraged capital structure after its acquisition by DL Chemical. Kraton's business fundamentals have recovered from its 2020 low thanks to the economic rebound and improving demand since early 2021,” Moody’s said in a press release.

Kraton’s outlook remains stable and Kraton Polymers’ outlook was given a stable outlook.

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