Moody's Places NXP Semi (NXPI) Ratings on Review for Upgrade Amid Qualcomm Deal

October 27, 2016 11:12 AM EDT

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Moody's Investors Service ("Moody's") placed under review for upgrade the ratings of NXP B.V. ("NXP") and NXP's publicly-traded parent, NXP Semiconductors N.V.'s (Nasdaq: NXPI), including NXP's Ba1 Corporate Family Rating ("CFR"), Baa2 senior secured rating, and Ba1 senior unsecured rating, and NXP Semiconductors' Ba2 cash convertible notes rating. This follows today's announcement that Qualcomm Inc. ("Qualcomm") plans to acquire NXP Semiconductors for $110 per share or about $38.5 billion, excluding transaction expenses.

RATINGS RATIONALE

The outcome of the review will depend on the nature of Qualcomm's support of NXP's existing debt. Should Qualcomm agree to guarantee all of the NXP debt, including the NXP Semiconductors cash convertible notes, Moody's would anticipate raising the senior unsecured ratings of NXP and NXP Semiconductors to that of the Qualcomm senior unsecured debt following closing of the acquisition. Since we expect that Qualcomm's senior unsecured rating will be well within the investment grade rating category, should Qualcomm guarantee all of NXP's debt, we would anticipate withdrawing the CFR of both NXP and NXP Semiconductors following closing of the acquisition. The SGL-1 speculative grade liquidity rating is unchanged and is expected to be withdrawn upon the closing of the acquisition.

..Issuer: NXP B.V.

.... Corporate Family Rating, Placed on Review for Upgrade, currently Ba1

.... Probability of Default Rating, Placed on Review for Upgrade, currently Ba1-PD

.... Senior Secured Bank Credit Facility, Placed on Review for Upgrade, currently Baa2

.... Senior Unsecured Regular Bond/Debentures, Placed on Review for Upgrade, currently Ba1

..Issuer: NXP Semiconductors N.V.

....Senior Unsecured Conv./Exch. Bond/Debenture, Placed on Review for Upgrade, currently Ba2

Outlook Actions:

..Issuer: NXP B.V.

....Outlook, Change to Rating Under Review from Positive

..Issuer: NXP Semiconductors N.V.

....Outlook, Change to Rating Under Review from Positive



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