Moody's introduces new ratings

Moody's Investors Service has introduced two new ratings: probability-of-default ratings and loss-given-default ratings.

The agency's current long-term credit ratings are opinions about expected credit loss that incorporate both the likelihood of default and the expected loss in the event of default. The loss-given-default rating methodology will disaggregate these two key assessments in long-term ratings. The agency said the methodology will also enhance the consistency in its notching practices across industries and will improve the transparency and accuracy of its ratings, as Moody's research shows that credit losses on bank loans have tended to be lower than those for similarly rated bonds.

Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha-numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations.

Loss-given-default assessments (or LGDs) are assigned to individual rated debt issues - loans, bonds and preferred stock - and express Moody's opinion of expected loss as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0%-9%) to LGD6 (loss anticipated to be 90%-100%).

Below is a list of the rating actions for Moody's rated companies, sorted by industry. The rating immediately after the company name denotes the corporate family rating and the percentages next to the LGDs represent the expected loss-given-default rates.

U.S. technology semiconductor and distributor

Advanced Micro Devices, Ba3; probability-of-default rating: Ba3; notes, upgraded to Ba3 from B1, LGD4, 59%; senior unsecured shelf, prospective Ba3, LGD4, 59%; subordinated and preferred shelves, prospective B2, LGD6, 97%.

Agilent Technologies, Inc., Ba2; probability-of-default rating: Ba2.

Amkor Technology, Inc., Caa1; probability-of-default rating: Caa1; term loan, upgraded to B1 from B3, LGD1, 7%; senior unsecured notes, upgraded to Caa1 from Caa3, LGD3, 44%; senior subordinated notes, upgraded to Caa2 from Ca, LGD5, 75%; convertible senior subordinated notes, upgraded to Caa3 from Ca, LGD5, 84%; convertible subordinated notes, upgraded to Caa3 from Ca, LGD6, 94%.

Avago Technologies Finance Pte. Ltd., B2; probability-of-default rating: B2; revolver, upgraded to Ba2 from B1, LGD1, 4%; senior unsecured notes, upgraded to B2 from B3, LGD3, 47%; senior subordinated notes, upgraded to Caa1 from Caa2, LGD6, 91%.

Avnet, Ba1; probability-of-default rating: Ba1; notes and convertible notes, Ba1, LGD3, 49%; senior unsecured shelf, prospective Ba1, LGD3, 49%; subordinated shelf, prospective Ba2, LGD6, 97%.

Cypress Semiconductor Corp., B1; probability-of-default rating: B1.

Freescale Semiconductor, Inc., Ba1; probability-of-default rating: Ba1; notes, Ba1, LGD3, 48%.

Ingram Micro Inc., Ba1; probability-of-default rating: Ba1.

Intcomex, Inc., B3; probability-of-default rating: B3; notes, upgraded to B3 from Caa1, LGD3, 48%.

Kulicke and Soffa Industries, Inc., B2; probability-of-default rating: B2.

Micron Technology Inc., Ba3; probability-of-default rating: Ba3; senior unsecured shelf, prospective B1, LGD5, 71%; subordinated shelf, prospective B2, LGD6, 97%.

Spansion, LLC, B3; probability-of-default rating: B3; notes, upgraded to B2 from Caa1, LGD3, 43%.

Tech Data Corp., Ba1; probability-of-default rating: Ba1.

© 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.