Kraton extends consent bid, payment for 6¾% notes, trims consent fee

By Susanna Moon

Chicago, Dec. 21 – Kraton Polymers LLC said it amended the consent bid for the $350 million of outstanding 6¾% senior notes due 2019 co-issued with Kraton Polymers Capital Corp.

The solicitation will now run until 11:59 p.m. ET on Jan. 5, extended from 11:59 p.m. ET on Dec. 29. The consent payment and withdrawal deadlines were then pushed back until the end of the offer.

Along with that, the consent fee was lowered to $27.00 per $1,000 principal amount of notes, reducing the total purchase price to $1,025.50 per $1,000 principal amount, according to a company press release.

As of Dec. 20, investors had tendered $249,386,000 principal amount, or 71.25%, of the 6¾% notes, which remains unchanged since 5 p.m. ET on Dec. 14, the previous consent payment date.

Kraton said on Dec. 15 that it secured the needed majority of consents to amend the notes and that it had executed a supplemental indenture to the notes.

As previously announced, Kraton is soliciting consents to eliminate or modify most of the covenants, some events of default and some other provisions of the notes indenture.

The tender offer and consent solicitation are being made in connection with Kraton’s proposed acquisition of Arizona Chemical Holdings Corp.

Originally, the total purchase price was set at $1,028.50 for each $1,000 principal amount of notes tendered by the consent payment deadline. The total amount had included a consent payment of $30.00 per $1,000 principal amount.

Holders who tendered their notes after the consent deadline would have received the tender offer payment of $998.50 per $1,000 of notes, before the offer was amended.

The company also will pay accrued interest up to but excluding the settlement date.

The tender offer began on Dec. 1.

The company said it expected to fund the offer using proceeds of a debt financing, along with cash on hand.

The offer is conditioned on completion of the Arizona Chemical acquisition and closing of the related debt financing.

The company began a roadshow on Dec. 7 for a $425 million offering of eight-year senior notes.

Kraton previously said it planned to redeem any notes that remain outstanding on March 1 at 101.688% of par plus accrued interest to the redemption date.

D.F. King & Co., Inc. (212 269-5550, 866 796-7179 or kra@dfking.com) is the information agent. Credit Suisse Securities (USA) LLC (212 538-2147 or 800 820-1653) is the dealer manager and solicitation agent.

Kraton is a Houston-based producer of engineered polymers and styrenic block copolymers. The company is a wholly owned subsidiary of Kraton Performance Polymers, Inc.

Arizona Chemical is a biorefiner of pine chemicals with executive offices in Jacksonville, Fla., and Almere, the Netherlands.

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