S&P rates Microsemi loan BB+

Standard & Poor’s said it affirmed the BB corporate credit rating on Microsemi Corp.

The outlook is stable.

The agency also said it assigned a BB+ rating with a recovery rating of 2 to the company’s proposed $325 million senior secured term loan A due 2019 and $100 million revolving credit facility due 2019.

The 2 recovery rating indicates 70% to 90% expected default recovery.

The proceeds from the term loan A will be used to fund the Vitesse acquisition, S&P said.

The ratings reflect Microsemi’s acquisitive growth strategy, which could result in leverage in the 3x to 4x range, but also the company’s track record of debt repayment and successful integration following such acquisitions, the agency said.

The ratings assigned to the proposed credit facilities are the same as the ratings assigned to the company’s existing senior secured debt, S&P said.

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