Kraton firms €300 million term loan B at Euribor plus 325 bps

By Sara Rosenberg

New York, Nov. 18 – Kraton Corp. finalized pricing on its €300 million seven-year term loan B at Euribor plus 325 basis points, the low end of revised talk of Euribor plus 325 bps to 350 bps and down from initial talk in the range of Euribor plus 350 bps to 375 bps, according to a market source.

The euro term loan has a 25 bps step-down at 2.5x net first-lien leverage, a 0% floor, an original issue discount of 99.5, and no amortization.

The company is also getting a $600 million seven-year term loan B priced at Libor plus 325 bps with a 25 bps step-down at 2.5x net first-lien leverage, a 0.5% Libor floor and an original issue discount of 99.5.

Amortization on the U.S. term loan is 1% per annum.

Both term loans (Ba3/BB) have 101 soft call protection for six months and ticking fees of half the margin from days 46 to 90 and the full margin thereafter.

Earlier in syndication, sizes on the U.S. and euro term loans were outlined from initial talk of $950 million equivalent total with U.S. and euro term loan B sizes to be determined, pricing on the U.S. term loan was lowered from talk in the range of Libor plus 350 bps to 375 bps, and both loans saw the addition of the step-down.

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.

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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