Moody's rates Avago loans B1, notes B3, Caa2

Moody's Investors Service said it assigned first-time long-term ratings to Avago Technologies Finance Pte. Ltd.

Ratings assigned include a prospective B2 corporate family rating; a prospective B1 rating for the $250 million senior secured revolver due 2011; a prospective B1 rating for the $725 million senior secured term loan due 2012, comprised of a $475 million portion to be drawn at closing and a one-time delayed-draw term loan of up to $250 million (available through April 30, 2006); a prospective B3 rating for the $750 million senior unsecured fixed- and floating-rate notes due 2013; a prospective Caa2 rating for the $250 million senior unsecured subordinated notes due 2015; and an SGL-2 speculative grade liquidity rating.

The outlook is stable.

Avago is the Semiconductor Products Group subsidiary of Agilent Technologies. Net proceeds from the $475 million senior secured term loan, $750 million senior unsecured notes and $250 million senior subordinated notes are being issued in connection with Avago's upcoming spinoff from Agilent and to finance the company's $2.785 billion leveraged buyout (including fees and expenses).

The B2 corporate family rating reflects Avago's substantial debt and intangible assets after separation, lack of operating history as a standalone entity, execution risk tied to timely realization of an effective standalone overhead corporate structure, financial statements with considerable distractions, and the lack of cash flow visibility during semiconductor industry downturns.

The B2 corporate family rating benefits from the company's strong global leadership position across the optoelectronics and enterprise solutions markets, focus on less cyclical analog/mixed signal integrated circuits, geographic and end market diversity, outsourced manufacturing model resulting in low working capital and capital expenditures requirements, competitive cost structure, and cohesive management team.

© 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.