Kraton (KRA) Completes Amendments to Term Loan Facility

Kraton Corporation KRA along with its fully-owned subsidiaries announced the closing of an amendment to its existing senior secured term loan facility.

 

The amendment increased borrowings under the Euro denominated tranche of this term loan by 150 million euros to 350 million euros. It also repriced the current term loans under the facility and extended maturity date of the term loan facility by roughly three years to Mar 8, 2025.

 

Proceeds from the additional borrowings under the Euro denominated tranche along with available cash in hand were used prepay $185 million of the then outstanding $485 million balance under the U.S. dollar denominated tranche.

 

Shares of Kraton have moved up 39.1% over the last six months, outperforming the 0.7% upside recorded by its industry.

 

 

 

Kraton swung to a profit in the fourth quarter of 2017. The chemical maker logged a profit of $69.6 million or $2.17 per share in the reported quarter against a loss of $3.7 million or 12 cents a year ago. Barring one-time items, adjusted earnings came in at 67 cents per share for the quarter, missing the Zacks Consensus Estimate of 79 cents.

 

Notably, the company’s long-term debt was $1,574.9 million at the end of 2017, down around 7% year over year. It also reduced net debt by $163 million in 2017.

 

Kraton expects adjusted EBITDA for 2018 to be roughly $400 million. The company also expects to cut net debt, excluding the net debt of its KFPC joint venture, by around $125 million this year.

 

Kraton Corporation Price and Consensus

 

Kraton Corporation Price and Consensus | Kraton Corporation Quote

 

Zacks Rank & Stocks to Consider

 

Kraton currently carries a Zacks Rank #3 (Hold).

 

Some better-ranked stocks in the chemical space are LyondellBasell Industries N.V. LYB, Arkema S.A. ARKAY and Methanex Corporation MEOH.

 

LyondellBasell has an expected long-term earnings growth rate of 9% and sports a Zacks Rank #1 (Strong Buy). The company’s shares have moved up 21.8% in a year. You can see the complete list of today’s Zacks #1 Rank stocks here.

 

Arkema has an expected long-term earnings growth rate of 8% and flaunts a Zacks Rank #1. The company’s shares have moved up 40.5% in a year.

 

Methanex has an expected long-term earnings growth rate of 15% and carries a Zacks Rank #2 (Buy). Its shares have gained 18.8% over a year. 

 

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