Moody’s assigns A3 to Foundry JV notes

Moody’s Investors Service said it assigned A3 ratings to Foundry JV Holdco LLC’s planned $1 billion of senior secured notes due Jan. 25, 2034, $700 million of senior secured private placement notes due Jan. 25, 2038, and $550 million of delayed-draw senior secured private placement notes due Jan. 25, 2039. The outlook is negative.

“The A3 rating benefits from a high degree of cash flow certainty provided by distributions from Arizona Fab LLC to Foundry JV Holdco. These distributions are ultimately backed by a wafer supply agreement and an operation and maintenance (O&M) agreement between Intel Corp. (Intel: A2 negative) and Arizona Fab LLC, which together ensure payment based on a schedule of minimum production. Minimum annual cash distributions to Foundry JV Holdco are structured to be sufficient to cover debt service. Intel's obligations under the agreements are supported by a parent guarantee from Intel,” Moody’s said in a press release.

Foundry JV will use the proceeds to repay a portion of the unrated $14.25 billion senior secured bank credit facilities as well as for transaction costs.

“The negative outlook reflects the negative outlook assigned to Intel's A2 rating and the close linkage of Foundry JV Holdco's credit quality to that of Intel,” Moody’s said. However, Intel does not directly guarantee Foundry JV Holdco’s debt service.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.