Kraton Polymers accepts tenders for 99.8% of 12% discount notes

By Jennifer Chiou

New York, May 24 - Kraton Polymers LLC and parent company Polymer Holdings LLC said they accepted tenders from holders of $149.75 million or 99.8% of the $150 million principal amount at maturity of 12% senior discount notes due 2014 issued by Polymer Holdings and Polymer Holdings Capital Corp.

The tender offer expired at 9 a.m. ET on May 22.

The companies solicited consents to amend the indenture governing the notes, eliminating substantially all of the restrictive covenants, some events of default and certain other provisions and said they executed a supplemental indenture on May 10.

The consent solicitation expired at 5 p.m. ET on May 5.

Noteholders who tendered received $860 for each $1,000 principal amount at maturity of notes. This included a $50 consent fee per $1,000 principal amount at maturity of notes for noteholders who tendered prior to the consent solicitation deadline.

Goldman, Sachs & Co. (800 828-3182 or 212 357-7867) is dealer manager for the offer, and Global Bondholder Services Corp. (212 430-3774 for banks and brokerages or 866 470-3800) is information agent.

The tender offer was subject to the receipt of consents from holders of a majority of the notes and the consummation of a refinancing by Kraton, which would add a new $365 million term loan facility to Kraton's existing term loan facility and increase the company's senior secured debt by $103 million.

The companies planned to fund the tender offer with proceeds from the new term loan facility and existing cash balances.

The notes rank junior to all existing and future debt of Kraton. Therefore, the increase in Kraton's senior secured debt will reduce the amount of assets available to noteholders in the event of a liquidation or reorganization of Kraton, according to the release.

Kraton Polymers is a specialty chemicals company based in Houston. The company began the offer on April 24.

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