Kraton (KRA) Closes Euro Term Loan, Reprices USD Term Loan
Zacks Investment Research | Aug 16, 2017 10:28PM ET
Kraton Corporation (NYSE:KRA) and some of its fully-owned subsidiaries declared the closure of a term loan of €260 million, priced at EURIBOR plus 2.50% with a floor of 0.75%. Proceeds from the transaction has been used to prepay part of the $886 million outstanding balance under the company’s USD Tranche (or USD-denominated term loan facility).
Kraton also repriced the remaining balance of the USD Tranche along with closing of the Euro Tranche. The new interest rate applicable for USD Tranche is LIBOR plus 3.00% with a 1% floor, which represents a 1% reduction from the previous interest rate of LIBOR plus 4.00%.
According to Kraton, the company is diligently improving overall capital structure since the acquisition of Arizona Chemical in Jan 2016. The latest move is expected to save annual cash interest of roughly $13 million. It will also be able to eliminate the covenant of financial maintenance that existed under the Term Loan facility.
Shares of Kraton have moved up 0.7% in the last three months, marginally underperforming the Zacks Investment Research
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