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S&P cuts Cypress loans, rates new loan BB-
Standard & Poor’s said it revised the outlook on Cypress Semiconductor Corp. to negative from stable and affirmed its BB- corporate credit rating.
S&P also said it assigned a BB- rating to the company’s proposed $700 million senior secured term loan B and lowered the issue-level rating on the existing senior secured term loan A and senior secured revolver to BB- from BB+.
The 3 recovery rating on the entire senior secured debt indicates 50% to 70% expected default recovery.
The agency also said it affirmed the B rating on the company’s $150 million convertible notes due 2020. The 6 recovery rating on the notes indicates 0 to 10% expected default recovery.
The negative outlook reflects the updated view of Cypress’s financial risk profile with pro forma adjusted leverage of high-4x after the close of the IoT acquisition, S&P said.
This is higher than the previous downgrade threshold of 4x, the agency said.
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