Kraton Corporation (KRA) and certain of its wholly owned subsidiaries announced the closing of a €260 million term loan priced at EURIBOR plus 2.50 percent with a 0.75 percent floor (Euro Tranche).
Proceeds from the Euro Tranche were used prepay a portion of the $886 million balance outstanding under the company's USD-denominated term loan facility (USD Tranche).
Concurrent with the closing of the Euro Tranche, the company re-priced the remaining balance of the USD Tranche. The new interest rate for the USD Tranche is LIBOR plus 3.00 percent with a 1 percent floor, a 1 percent reduction from the previous interest rate of LIBOR plus 4.00 percent.
"Since the closing of the Arizona Chemical acquisition in January of 2016 we have worked diligently to improve our overall capital structure. This transaction represents expected annual cash interest savings of approximately $13 million, and in light of the company's financial performance and improved capital structure, we were able to eliminate the financial maintenance covenant that existed under the term loan facility," said Stephen Tremblay, Kraton's executive vice president and chief financial officer.
Read More: Kraton successfully closes €260 million term loan
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