S&P rates Orbotech loans B+

Standard & Poor’s said it assigned a B+ long-term corporate credit rating to Orbotech Ltd., along with a B+ rating to its $300 million senior secured loans.

The rating reflects its aggressive financial risk profile and weak business risk profile, S&P said.

Orbotech recently issued $300 million in loans and used the proceeds, along with about $86 million of cash, to fund the acquisition of SPTS Technologies.

Orbotech’s business risk profile is primarily constrained by the group’s potentially highly volatile revenues and margins, competition with larger players in some segments, relatively limited product diversification compared with larger industry peers and technological risks inherent in the industry, S&P said.

Demand from electronics and semiconductor manufacturers is very volatile and closely correlated with the economic cycle, capacity utilization levels and replacement cycles, the agency said.

These factors are partially mitigated by a view of the group’s leading niche market positions thanks to solid product propositions that provide higher cost efficiencies to its customers and Orbotech’s track record of achieving first-mover advantages when turning a new technology into a production tool, S&P said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.