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BofA Agents Kraton Performance Polymer’s $250MM Credit Facility

March 29, 2013, 07:40 AM
Filed Under: Manufacturing

Kraton Performance Polymers, a leading global producer of styrenic block copolymers, announced 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. 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.

Bank of America, N.A. served as administrative agent, collateral agent and security trustee. Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities, LLC and Wells Fargo Capital Finance, LLC were joint lead arrangers and joint book managers. J.P. Morgan Chase Bank, N.A. and Wells Fargo Bank, National Association served as co-syndication agents and Barclays Bank PLC served as document agent. The syndication also included Siemens Financial Services, Inc. and HSBC Bank USA, N.A.

In conjunction with the refinancing, the company expects its first quarter 2013 results to reflect a non-cash charge of approximately $5 million resulting from accelerated amortization of debt issuance costs and a charge of approximately $0.7 million due to the termination of an interest rate swap, both of which will be reflected in interest expense for the period.

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