Moody’s rates Allegro, facility B1

Moody’s Investors Service said it assigned first-time ratings to Allegro MicroSystems, Inc., including a corporate family rating of B1, a probability of default rating of B1-PD, and a senior secured term loan facility rating of B1.

“The B1 CFR reflects Allegro’s modest financial leverage, which Moody’s expects will decline towards 3x debt to EBITDA (Moody’s adjusted) over the next 12 to 18 months. The CFR also considers Allegro’s niche leadership position in the $2.4 billion fragmented, magnetic sensors integrated circuit market. The strong market position is supported by customer relationships, which in part reflect Sanken’s majority ownership and the connection this provides to Sanken’s Japanese customer base,” Moody’s said in a press release.

Proceeds and balance sheet cash will fund a $400 million cash distribution to Allegro’s shareholders Sanken Electronics Co., One Equity Partners and Allegro management.

The outlook is stable.

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