Kraton to launch $606 million and €220 million term loans on Monday

By Sara Rosenberg

New York, July 27 – Kraton Corp. is scheduled to hold a lender meeting in London on Monday to launch a $606 million covenant-light term loan and a €220 million covenant-light term loan, according to market sources.

J.P. Morgan, Deutsche Bank, Credit Suisse and Bank of America Merrill Lynch are joint lead arrangers and joint bookrunners on the deal. Credit Suisse is the administrative agent.

Price talk on the U.S. term loan is Libor plus 325 basis points to 350 bps with a 1% Libor floor and a par issue price, and talk on the euro term loan is Euribor plus 250 bps to 275 bps with a 1% floor and an issue price of 99.75 to par, sources said.

Both term loans have 101 soft call protection for six months.

Commitments are due on Aug. 7, sources added.

Proceeds from the euro term loan will be used to repay a portion of the company’s existing U.S. term loan, and the U.S. term loan will be used to reprice the remaining amount under the U.S. term loan from Libor plus 400 bps with a 1% Libor floor.

With this transaction, the company expects to generate savings in interest expense annually and eliminate financial covenants.

Kraton is a Houston-based producer of engineered polymers and styrenic block copolymers.

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