Weekly Downgrade Wrap-Up
As usual, we have a week’s worth of ratings actions on the debt of LBO-backed companies from the agencies, Standard & Poor’s and Moody’s Investor Services. This week the agencies must’ve been busy confusing all of us with changes to their ratings systems (S&P) and finding buyers for Warren Buffet's stake (Moody's) because there’s only one. Either that, or private equity portfolio companies have magically be relieved of their massive debt burden! Ha. What would I write about then? Anyways, the company in the spotlight is Dutch semiconductor company NXP B.V., backed by AlpInvest Partners, Apax Partners, Bain Capital, Kohlberg Kravis Roberts & Co. and Silver Lake. S&P affirmed the company’s long-term corporate credit rating at ‘CCC’. In light of the company’s distressed debt exchange, lowered the ratings on the company's secured and unsecured notes to 'CC' and placed them on CreditWatch negative while affirming the remaining notes at 'B-'. The company plans to undergo a distressed debt exchange on July 23. S&P calculates that the latest exchanges should have a net $26 million negative impact on NXP's cash balances. Since there’s only one, I dug up a little extra info on this company.
