Kraton Performance Polymers in Acquisition Financing and Refinancing Transactions

Cleary Gottlieb represented Kraton Performance Polymers in a series of acquisition financing and refinancing transactions, consisting of:

• a private offering of $440 million in aggregate principal amount of 10.50% Senior Notes due 2023. Credit Suisse, Nomura and Deutsche Bank served as joint book-running managers in connection with the offering of the Notes;
• a $1.35 billion six year senior secured first lien term loan facility with Credit Suisse, Nomura and Deutsche Bank as joint lead arrangers and joint book-runners, and Credit Suisse as administrative agent and collateral agent;
• a new $250 million five year asset-based revolving credit facility with Bank of America, Credit Suisse, Nomura and Deutsche Bank as joint lead arrangers and joint book-runners, and Bank of America as administrative agent, collateral agent and security trustee; and

a tender offer to purchase for cash any and all of its outstanding 6.75% Senior Notes due 2019 and a concurrent solicitation of consents from the holders to amend the indenture governing the 6.75% Notes. As a result of receiving tenders and related consents from a majority of holders, a supplemental indenture was executed to eliminate substantially all of the restrictive covenants, certain events of default and related provisions contained in the indenture. Kraton also issued irrevocable notices of redemption for any 6.75% Notes that are not purchased in the tender offer. Credit Suisse served as Dealer Manager and Solicitation Agent, and D.F. King & Co. was the Information Agent for the tender offer.

The proceeds of the offering of the $440 million Notes, together with the proceeds from the $1.35 billion senior secured term loan facility, were used for the cash purchase price for the Arizona Chemical Acquisition and to refinance substantially all of Kraton’s existing indebtedness and to pay accrued and unpaid interest thereon, related fees and expenses and tender premiums with respect to the existing indebtedness.

Kraton Performance Polymers, through its operating subsidiary Kraton Polymers and its subsidiaries, is a leading 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. Kraton’s polymers are used in a wide range of applications, including adhesives, coatings, consumer and personal care products, sealants and lubricants, and medical, packaging, automotive, paving, roofing and footwear products. The company’s customers are diversified by industry and geography, with more than 800 customers in over 60 countries worldwide, and the company is the only SBC producer with manufacturing and service capabilities on four continents.