Moody's rates Applied Materials Prime-2

Moody's Investors Service said it assigned a Prime-2 short-term rating to Applied Materials Inc. for its newly established commercial paper program and affirmed the company's A3 long-term senior unsecured rating.

Proceeds will be used for general corporate purposes, including potential funding for Applied's pending acquisition of Varian Semiconductor (unrated).

The outlook is stable.

Applied's Prime-2 short term rating reflects the company's strong liquidity and our expectations of solid free cash flow over the intermediate term, the agency said.

Applied's new $1.5 billion commercial paper program is backstopped by a $1.5 billion four-year revolving credit facility, which expires May 25, 2015.

Pro forma the company's recent $1.75 billion debt offering as part of the Varian acquisition financing, Applied's debt-to-EBITDA ratio is about 0.9 times.

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