S&P rates Freescale Semiconductor notes B

Standard & Poor's said it assigned a B rating to Freescale Semiconductor Inc.'s first-lien notes due 2021.

The recovery rating on this debt is 3, indicating 50% to 70% expected default recovery.

The proceeds will be used to repay of a portion of its existing first-lien notes due 2018. The new notes are rated the same as the corporate credit rating on the company, S&P said.

The B corporate credit and other ratings and stable outlook reflect the company's position as one of the leading providers of automotive semiconductor products, moderated by its U.S. and European automotive client concentration and its exposure to cyclical market conditions, the agency said.

While Freescale's revenues and earnings declined in 2012 due to cyclical market weakness and the secular downturn of its cellular handset business, S&P said it expects modest revenue growth and flat earnings performance over the coming year such that leverage will remain elevated at about 9x during 2013.

Consequently, the company's financial risk profile remains highly leveraged, the agency said.

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