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S&P: Analog Devices notes BBB
S&P said it assigned a BBB rating to Analog Devices Inc.'s senior unsecured notes.
The proceeds will be used to partly fund the acquisition of Linear Technology Corp.
The agency said the rating on the new notes is the same as the company’s BBB corporate credit rating, which is unchanged with a negative outlook.
In July 2016, the company announced the acquisition of Linear for about $15 billion to be funded with more than $7 billion of new debt proceeds, S&P explained.
In September 2016, Analog issued $5 billion in term loans that will be drawn at the close of transaction in early 2017, the agency said.
The proposed unsecured notes will complete the overall financing, S&P said.
The ratings reflect pro forma adjusted leverage of nearly 4x after the close of the Linear transaction as a result of the incremental debt and reduced cash balances that Analog Devices will incur to complete the acquisition, the agency said.
Offsetting this high leverage is an expectation that the management is fully committed to rapid debt reduction, partly reflected in the short tenors of the term loans issued in September, S&P said.
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