Moody's puts CEVA on upgrade review

Moody's Investors Service said it placed the corporate family rating and all instrument ratings of CEVA Group plc on review for upgrade.

The ratings include its Caa2 corporate family rating and existing instrument ratings, Caa1 senior secured bank credit facility rating, Caa3 senior secured facilities rating and C senior unsecured facilities rating.

The Caa2-PD probability of default rating remains unchanged.

The outlook also was revised to "rating under review" from stable.

The review follows news that the group intends to list its shares in the Swiss Stock Exchange with expected proceeds of CHF 743 million from the offering and an additional CHF 407 million from the sale of the CMA CGM Securities, Moody's said.

CMA CGM will be acquiring a 24.99% stake in the group, the agency noted.

Moody's said it expects a significant reduction in leverage as outlined in the company's initial public offering prospectus.

This will address a previous concern regarding the sustainability of the group's capital structure as CEVA has publicly announced that they intend to use the IPO proceeds to repay debt, the agency said.

The repayment of debt will also improve the group's cash flows as interest payments are expected to reduce considerably, Moody's added.

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