S&P revises Cadence outlook to positive

S&P said it changed its outlook for Cadence Design Systems Inc. to positive from stable and affirmed all its ratings, including the BBB+ rating on its $350 million of notes due Oct. 15.

The positive outlook reflects our expectation that Cadence will likely continue to benefit from strong growth rates and above-average EBITDA margins on its mission-critical EDA solutions. That said, we believe the company may pursue more debt-funded acquisitions that increase its leverage. If Cadence maintains leverage of below 1.5x over the next 12 months, after incorporating its acquisitions, we could consider raising our ratings,” S&P said in a press release.

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