Moody’s ups Microsemi loans, rates notes B2

Moody's Investors Service said it rated Microsemi Corp.'s new senior unsecured notes at B2 and upgraded the provisional rating on the proposed senior secured credit facilities to provisional Ba2.

The agency affirmed all of the other ratings, including the Ba3 corporate family rating, Ba3-PD probability of default rating, SGL-2 speculative grade liquidity rating and the Ba2 rating on the existing senior secured credit facilities (revolver due 2019, term loan A due 2019 and term loan B due 2020).

The outlook is stable.

The upgrade to the proposed facilities reflects the increased cushion of unsecured liabilities due to the issuance of the notes.

Proceeds from the proposed facilities and the notes, along with balance sheet cash, Microsemi equity, and PMC option proceeds, will be used to fund Microsemi's tender offer for all of PMC's outstanding shares, to fund transaction expenses, and to refinance all of the existing Microsemi and PMC outstanding debt.

Upon closing of the acquisition, Moody's said it expects to convert the provisional ratings to definitive ratings. It expects to withdraw the ratings on the existing senior secured credit facilities following repayment.

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