S&P rates NXP notes B

Standard & Poor's said it assigned its B issue rating to the proposed senior unsecured notes due 2018 to be issued by NXP BV (B+/stable/--) and its wholly owned subsidiary, NXP Funding LLC. The issue rating is one notch below the corporate credit rating on NXP BV.

At the same time, S&P assigned a recovery rating of 5 to the proposed notes, indicating an expectation of modest (10%-30%) recovery prospects in the event of a payment default.

In addition, S&P affirmed its B+ issue ratings on NXP's existing senior secured notes (denominated in U.S. dollars and euros) and senior secured term loans. The recovery ratings on these senior secured facilities are unchanged at 3, indicating an expectation of meaningful (50%-70%) recovery in the event of a payment default.

S&P also affirmed its BB issue rating on NXP's €620 million super senior revolving credit facility due March 2017. The recovery rating on the revolver remains unchanged at 1, reflecting an expectation of very high (90%-100%) recovery for debtholders in the event of a payment default.

S&P said it understands that NXP will use the proceeds of the proposed notes along with drawings on its revolver to redeem the floating rate notes due 2016 ($616 million outstanding).

"We see the transaction as positive for the senior secured debtholders, with recovery prospects improving to the high end of the 50%-70% range," S&P said in a news release.

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