S&P puts MKS on negative watch

S&P said it placed all its ratings on MKS Instruments Inc., including the BB+ issue-level rating on its senior secured debt, on CreditWatch with negative implications.

The CreditWatch placement follows MKS' July 1 announcement it made a cash and stock offer for Atotech Ltd., the agency said. The company intends to fund the about $3.5 billion cash portion of its offer with cash on hand and additional debt financing and will pay for the remaining portion using its equity.

If the deal closes, the agency said it estimates MKS' S&P Global Ratings-adjusted net leverage would increase to over 4x, without accounting for synergies from the transaction, from under 0.5x.

“Nevertheless, we may maintain our BB+ issuer credit rating on the company if–after reviewing management's integration plan–we are highly confident it will be able to rapidly reduce its leverage to a level commensurate with the current rating in the four quarters following the close of the deal,” S&P said in a press release.

S&P said it aims to resolve the CreditWatch once it has fully assessed the transaction's effects on the company's business and financial positions as well as the likelihood that it will close as proposed.

© 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.