 |
||||||
| Sunday, March 21, 2010 |
Contact Us
|
 RSS
|
|||||
|
|
| |
|||
|
||||||
|
||||||
|
|
ANALYSIS
March 2, 2009
Sagging Index no longer reflects what’s going on in the market, some say, Replacements? Google it, to start.
March 2, 2009
Downward price spiral will actually boost the cost of capital for most companies. CFOS, take note.
March 2, 2009
The latest bailout at AIG could be a preview of how the president will deal with Wall Street.
March 2, 2009
No corporate defaults. Big debt offerings. Percolating CP issuance. Things may be looking up in the capital markets.
|
|
|
|
February 10, 2009 3:57 PM ET
Freescale Semiconductors made another move to stabilize its liquidity, this time asking its lenders for a loan of up to $1 billion. If Freescale fails to secure the loan from its lenders, it will ask bondholders to trade their notes for interests in such a loan. The purpose of the proposed distressed debt exchange “is to improve the company’s financial flexibility by reducing its overall indebtedness and related interest expense,” Freescale said in a press release. Freescale’s operations have been hammered by falling demand for its products and its heavy debt load. It posted an operating loss of $4.2 billion in the fourth quarter 2008 as sales plummeted 39% compared to a year earlier. The company announced on Jan. 22 that it drew down its quickly dissipating $750 million revolving credit facility by $184 million. The move came a little over a month after the company chose to exercise the payment-in-kind option on $1.5 billion in outstanding debt. At the time of the revolver drawdown, Alan Campbell, Freescale’s chief financial officer, said in a press release that the move “improves the company’s financial flexibility as we continue to execute our business plans.” Freescale had cash and cash equivalents totaling $1.4 billion at the end of 2008. The company’s revolving credit facility includes a $60 million commitment from Lehman Commercial Paper that was not honored after Lehman filed for bankruptcy. Freescale drew down its revolver by $460 million in Oct. 2008 and has approximately $23 million in letters of credit outstanding under the facility. A consortium of private equity firms, including Blackstone Group, Carlyle Group, Permira Funds and Texas Pacific Group, bought Freescale in December 2006 for $17.6 billion. As a result, the Austin, Texas-based company ended up with a debt load of more than $9.5 billion. That’s a debt-to-earnings ratio before interest, taxes, depreciation and amortization of between six and seven for 2007. In Freescale’s own words in its 10-K filing for 2007, “We are highly leveraged.” On Jan. 30, Fitch Ratings cut Freescale’s credit rating two notches to CCC on “expectations that the company’s free cash flow usage will be meaningfully greater than previously expected over the next two years and will likely consume a significant amount of the company’s current liquidity.” “In the absence of a substantial recovery in the company’s operations or improved access to credit markets,” Fitch continued, “Freescale will be challenged to meet fixed costs over the intermediate term.” Fitch also said it accounted for the potential for a distressed debt exchange in its rating.
|
|
|
|
Latest News
• Reversal? Stanford advisers sue the SEC
March 5, 10:52 AM EST
• Third of companies not complying with new tax reporting rule
March 4, 4:25 PM EST
• Regulators aware of problems at First National for six years: audit
March 4, 3:31 PM EST
• Influential advisory group to look at fair-value, off-balance sheet accounting
March 4, 4:16 PM EST
• In a first, NY State hopes to sell bankrupt insurer
March 4, 3:59 PM EST
CRAIN'S BENEFITS OUTLOOK 2009
SPECIAL REPORT
MOST POPULAR
|
MORE ANALYSIS
Crain Financial Group:
InvestmentNews |
Pensions & Investments |
Workforce Management
Copyright ©2010 Crain Communications Inc
All rights reserved.
Privacy Policy |
Terms & Conditions