S&P rates Cadence loan BBB-

Standard & Poor's said it assigned a BBB- rating to Cadence Design Systems Inc.'s $300 million unsecured term loan facility.

The proceeds will be used for general corporate purposes, including supporting its recently expanded share repurchase program.

The company’s BBB- corporate credit rating is unchanged.

The ratings reflect the company's significant and highly visible base of contractually recurring revenues and leading position within a highly concentrated semiconductor design software marketplace, S&P said.

Although the company’s adjusted net leverage may approach or slightly exceed 1x over the next 24 months due to lower cash balances, the agency said it expects the current round of expanded buybacks to abate after the company addresses the dilution from recent warrant settlements.

Over the longer term, a more modest shareholder return policy and top-line growth should keep leverage at a level consistent with its minimal financial-risk assessment, S&P said.

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