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Freescale seeks US$1 billion new funding but risks ‘junk’ credit status
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Private equity owned Freescale Semiconductor is tapping existing creditors to the tune of US$1 billion. Freescale was taken private in 2006 as part of a US$17 billion leveraged buyout, but has struggled to be profitable under the debt load. According to Standard & Poor's Ratings Services, the new funding round is ‘tantamount to default’ as the company is most likely to need to recapitalize in due course.
Moody's Investors Service has downgrade Freescale's credit status to, ‘B2’ from ‘B1’ a ‘junk’ classification in Moody’s terminology.