New Issue: Polymer Holdings sells $91.9 million proceeds 10-year discount note at 61.276 to yield 12%

By Paul A. Harris

St. Louis, Oct. 20 - Polymer Holdings LLC in conjunction with Polymer Capital Corp., subsidiaries of Kraton Polymers, sold $150 million face amount of 10-year senior discount notes (Caa2/B-) at 61.276 on Wednesday to yield 12%, according to a syndicate source. Proceeds were $91.914 million.

Price talk was 11 1/8% to 11 3/8%.

The notes will pay a 0% coupon until Jan. 15, 2009, after which the coupon steps up to 12%.

Goldman Sachs & Co. and UBS Investment Bank ran the books for the Rule 144A issue.

Proceeds will be used to repay debt.

The issuer is a Houston-based maker of styrenic block copolymers used in adhesives, sealants and other materials.

Issuer:	Polymer Holdings LLC/Capital Corp. (Kraton Polymers)
Face amount:	$150 million
Proceeds:	$91.914 million
Maturity:	July 15, 2014
Security description:	Senior discount notes
Bookrunners:	Goldman Sachs & Co., UBS Investment Bank
Coupon:	0% until Jan. 15, 2009, then steps up to 12%
Price:	61.276
Yield:	12%
Spread:	802 basis points
Call features:	Make-whole call at Treasuries plus 50 basis points until July 15, 2009, then callable at 106, 104, 102, par on and after July 15, 2012
Pricing date:	Oct. 20
Settlement date:	Nov. 2
Ratings:	Moody's: Caa2
	Standard & Poor's: B-
Price talk:	11 1/8%-11 3/8%

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