Fitch turns Microchip view to positive

Fitch Ratings said it changed its outlook for Microchip Technology Inc. to positive from stable and affirmed its BBB issuer and senior unsecured ratings.

“The continued positive rating momentum reflects Microchip's strengthening financial structure from solid operating performance and use of FCF for debt reduction, as the company closes in on achieving its long-term 1.5x net EBITDA leverage target,” the agency said in a press release.

However, Fitch noted it anticipates the company will use most of the agency-forecasted $2 billion in annual free cash flow for share repurchases instead of incremental debt reduction.

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