S&P rates Kraton loans BB-

S&P said it assigned its BB- issue-level ratings to Kraton Corp.'s proposed €220 million term loan issued by Kraton Polymers Holdings BV and estimated face value $606 million term loan issued by Kraton Polymers LLC.

The recovery ratings on both debt issuances are 1, indicating expectations for very high (90%-100%; rounded estimate: 95%) recovery in the event of a payment default.

“The transaction is approximately leverage-neutral and we expect the company to use proceeds to refinance the company's existing term loan,” S&P said in a news release.

At the same time, S&P said it is raising its issue-level ratings on the company's existing senior secured debt to BB- from B+ and revising the recovery ratings to 1 from 2, indicating expectations for very high (90%-100%; rounded estimate: 95%) recovery in the event of a payment default.

S&P said it is also affirming the B- issue-level rating and maintaining a 5 recovery rating on the company's senior unsecured notes , indicating expectations of modest (10%-30%: rounded estimate: 15%) recovery in the event of a payment default.

The corporate credit ratings on Kraton Corp. and Kraton Polymers LLC remain B, with a positive outlook.

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