S&P upgrades Orbotech

S&P said it raised the long-term corporate credit rating on Orbotech Ltd. to BB from BB-.

The agency also said it subsequently withdrew the rating at the issuer’s request following the redemption of its rated debt facility.

The outlook was stable at the time of withdrawal, S&P said.

The upgrades follow Orbotech’s recent de-leveraging, which it achieved using net proceeds from a public share issuance of $100 million and new $110 million credit facility raised at Orbotech’s subsidiary SPTS, the agency explained.

The proceeds from both transactions were used to prepay the company’s outstanding syndicated term loan issued in 2014, S&P said.

Orbotech now benefits from a net cash positive position with unrestricted cash of about $180 million as of June 30, the agency said.

These transactions also led to a meaningful decline in Orbotech’s cost of debt as the new facility carries a low margin of 1.45% with further potential step-downs based on leverage targets, S&P said.

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