S&P upgrades Microsemi

S&P said it revised its issue-level rating on Microsemi Corp.’s senior secured term loans and revolving credit facility to BB from BB- and revised the recovery rating to 2 from 3. The 2 recovery rating indicates an expectation for substantial recovery (70% to 90%; lower half of the range) in the event of payment default.

The change reflects incremental issuance of $250 million of term A loans that the company will use to repay an equivalent amount of term B loans and that carry higher required amortization than the term B loans, S&P said.

The change also reflects repayment of the term B loans since the original issuance of $280 million in the quarter ended April 3, 2016 publically disclosed payments associated with recent divestitures of $321 million announced in the current quarter ending in June.

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