Daily News: March 29, 2013

WFCF, Merrill, J.P. Morgan Arrange Kraton Refinancing

Kraton Performance Polymers announced that it has closed an aggregate $250 million of revolving credit facilities. The facilities are comprised of a $150 million five-year, secured U.S. revolving credit facility and a $100 million five-year, secured non-U.S. revolving credit facility.

Bank of America served as administrative agent, collateral agent and security trustee. Merrill Lynch, J.P. Morgan Securities and Wells Fargo Capital Finance were joint lead arrangers and joint book managers. J.P. Morgan Chase and Wells Fargo Bank served as co-syndication agents and Barclays Bank served as document agent. The syndication also included Siemens Financial Services and HSBC Bank USA.

Kraton said availability under the facilities will be subject to a borrowing base and the facilities will be secured by receivables and inventory. The facilities include a $100 million uncommitted accordion feature that, subject to borrowing base availability and approval of the bank syndicate, could increase aggregate availability to $350 million.
The new revolving credit facilities replace the company’s $200 million revolving credit facility and bank term loan. An initial draw of $40 million under the new U.S. revolving facility was used, in conjunction with cash on hand, to repay the $82 million balance outstanding under the company’s bank term loan.

“The favorable credit market conditions provided us with an opportunity to refinance our existing bank facility. We believe this new facility will provide greater financial flexibility while also lowering our cost of capital,” said Stephen E. Tremblay, Kraton’s vice president and chief financial officer.

Houston, TX-based Kraton Performance Polymers, through its operating subsidiary Kraton Polymers and its subsidiaries is a global producer of engineered polymers and one of the world’s largest producers of styrenic block copolymers (SBCs), a family of products whose chemistry was pioneered by Kraton almost 50 years ago.