S&P rates Microchip loan BBB-, convertibles BB-

Standard & Poor’s said it assigned an unsolicited BB+ corporate credit rating to Microchip Technology Inc.

The outlook is stable.

The agency said it assigned an unsolicited BBB- rating and unsolicited 2 recovery rating to the company’s $2.5 billion senior credit facility. The 2 recovery rating indicates 70% to 90% expected default recovery.

S&P also said it assigned an unsolicited BB- rating and 6 recovery rating to the company’s 1.625% senior subordinated convertible notes due 2025 and 2.125% junior subordinated convertible notes due 2037. The 6 recovery rating indicates 0 to 10% expected default recovery.

The ratings reflect Microchip’s modest overall market position within the highly fragmented microcontrollers and analog markets, the agency said, and the significant competition it faces against larger semiconductor firms with greater financial resources.

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