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Kraton sets talk on $950 million equivalent U.S., euro term loan B
By Sara Rosenberg
New York, Nov. 8 – Kraton Corp. released price talk on its $950 million equivalent U.S. and euro seven-year term loan B (Ba3/BB) with its lender call on Monday, according to a market source.
Talk on the U.S. term loan is Libor plus 350 basis points to 375 bps with a 0.5% Libor floor and an original issue discount of 99.5, and talk on the euro term loan is Euribor plus 350 bps to 375 bps with a 0% floor and a discount of 99.5, the source said.
Both term loans have 101 soft call protection for six months.
Amortization on the U.S. term loan is 1% per annum. The euro term loan has no amortization.
Ticking fees on the term loan debt are half the margin from days 46 to 90 and the full margin thereafter.
The U.S. and euro term loan B sizes are still to be determined, but the expectation is for a roughly €300 million euro tranche.
Goldman Sachs, BMO Capital Markets, Deutsche Bank Securities Inc., HSBC Securities, Wells Fargo Securities LLC, BNP Paribas Securities Corp., SMBC, BofA Securities Inc. and Mizuho are the arrangers on the deal.
Commitments are due at noon ET on Nov. 18, the source added.
Proceeds will be used to help fund the acquisition of the company by DL Chemical Co. Ltd. for $46.50 per share. The transaction has an enterprise value of about $2.5 billion.
Kraton will be financed on a stand-alone basis and will be a ring fenced, wholly owned non-guarantor subsidiary of DL Chemical.
Closing is expected in the first half of 2022, subject to customary conditions, including the receipt of stockholder and regulatory approvals.
Kraton is a Houston-based producer of specialty polymers and high-value bio-based products derived from pine wood pulping co-products. DL Chemical is a Korea-based petrochemical company.
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