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Moody's upgrades Freescale
Moody's Investors Service said it upgraded the corporate family and probability of default ratings of Freescale Semiconductor, Inc. to B3 from Caa1, senior secured debt rating to B1 from B2, senior subordinated notes rating to Caa2 from Caa3 and speculative-grade liquidity rating to SGL-2 from SGL-3.
The ratings upgraded include the company's $590 million, originally $750 million, senior secured revolving credit facility due 2012 to B1 (LGD 3, 30%) from B2 (LGD 3, 30%); $2.237 billion (originally $2.265 billion) senior secured extended-maturity term loan due 2016 to B1 (LGD 3, 30%) from B2 (LGD 3, 30%); $750 million 10 1/8% senior secured notes due 2018 to B1 (LGD 3, 30%) from B2 (LGD 3, 30%); $1.380 billion 9¼% senior secured notes due 2018 to B1 (LGD 3, 30%) from B2 (LGD 3, 30%); and $764 million, originally $1.6 billion) 10 1/8% senior subordinated notes due 2016 to Caa2 (LGD 6, 93%) from Caa3 (LGD 6, 93%).
The company's other ratings include a Caa2 (LGD 5, 80%) rating on its $57 million, originally $500 million, senior unsecured floating-rate notes due 2014; Caa2 (LGD 5, 80%) rating on its $255 million, originally $1.5 billion, 9 1/8%/9.7/8% senior unsecured toggle notes due 2014; Caa2 (LGD 5, 80%) rating on its $886 million, originally $2.35 billion, 8 7/8 % senior unsecured notes due 2014; and Caa2 (LGD 5, 80%) rating on its $750 million 10¾% senior unsecured notes due 2020.
The outlook was changed to positive from stable.
The upgrade reflects the company's strong revenue growth and EBITDA expansion following the robust 2010 recovery in global demand for embedded processing semiconductors across the company's addressable end markets, Moody's said.
It also incorporates an expectation for continued improvement in Freescale's operating performance, financial leverage metrics and free cash flow generation over the succeeding 12 months, the agency said.
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