Fitch rates ASML notes BBB+

Fitch Ratings said it assigned an expected rating of BBB+ to ASML Holding NV's proposed senior unsecured notes.

The proceeds of the notes, which were launched with a 10-year maturity and a target size of €750 million, will be used in part to prepay the 5.75% bonds due 2017, currently the subject of a tender offer by ASML, Fitch said.

While the overall amount of debt on ASML's balance sheet will increase, the exercise is expected to bring down the overall average cost of funds for ASML, the agency said.

The notes are structured as senior unsecured obligations, include a change of control provision, cross default and negative pledge, Fitch said. In line with the terms of the 2017 bonds, there are no financial covenants, the agency added.

The ratings are supported by the company's leading market position in the design and manufacture of lithography equipment, the central process in the manufacture of semiconductors, Fitch said.

Lithography is a volatile and cyclical industry, with semiconductor customers quickly adjusting investment plans as revenues react to the economic cycle, the agency said.

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