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Moody’s upgrades ON Semiconductor loan
Moody’s Investors Service said it raised its rating on ON Semiconductor Corp.’s senior secured revolving credit facility rating to Baa2 from Baa3.
Concurrently, the agency affirmed ON Semi’s Ba1 corporate family rating, Ba1-PD probability of default rating, and Ba2 rating on the senior unsecured notes. The SGL-1 speculative grade liquidity rating is unchanged.
“The refinancing of secured debt with lower coupon unsecured debt is credit positive given the reduction in cash interest expense. ON Semi plans to use the net proceeds from the new $1.3 billion of 0.5% convertible senior notes due 2029 (new convertibles) to repay the senior secured term loan due September 2026 (term loan). The upgrade to the rating of the senior secured credit facilities is dependent on repayment of the term loan, which Moody's expects will occur shortly following closing of the new convertibles,” the agency said in a statement.
Following full repayment, Moody's said it will withdraw the term loan’s rating.
The outlook is stable.
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