Fitch places Xilinx on watch

Fitch said it placed Xilinx Inc.’s A- ratings, including the long-term issuer default rating, on watch negative on the announcement the company agreed to be acquired by Advanced Micro Devices Inc. (AMD) in an all-stock transaction valued at $35 billion.

The watch action affects $2.4 billion, including the undrawn $400 million revolving credit facility. Fitch plans to resolve the RWN upon reviewing the final debt and guarantee structure and resolution could result in affirmation at A- or a multi-notch downgrade, the agency said.

“Fitch believes Xilinx bondholders face increased risk related to the sustainability of rapid expected share gains by AMD, given its ascendance in core markets for competitors with still considerably greater market share and financial flexibility,” the agency said in a press release.

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