Fitch gives Synaptics, notes BB

Fitch Ratings said it assigned a first-time BB long-term issuer default rating to Synaptics Inc. Also, Fitch gave a BB/RR4 senior unsecured issue rating to Synaptics' outstanding convertible notes and senior notes expected to be issued in the pending transaction.

“After an extended period of underperformance with sustained revenue declines, Synaptics installed a new management team that quickly identified several margin improvement measures that would address past inefficiencies in the company's supply chain and sales strategy. In particular, new management launched an effort to reduce the number of foundry and packaging/test partners from 10 and 21, respectively, to levels consistent with industry norms as higher volumes with partners enable increased manufacturing cost reductions that allow for gross margins expansion,” Fitch said in a press release.

Synaptics seeks to sell $400 million of senior unsecured notes with proceeds used to repay the $100 million balance under the revolver and partially prefund the $525 million maturity of the convertible notes in June 2022.

The outlook is stable.

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