Freescale IPO Cuts Default Odds

Offering gives the company $4.4 bln equity cushion

Creditors of Freescale Semiconductor Holdings are growing more confident the target of the largest semiconductor buyout will avoid default after its initial public offering gave bondholders a $4.4 billion equity cushion.

Credit-default swaps on the company, which two months ago priced in a 46 percent chance of default, now imply 35 percent, after the largest supplier of chips to the U.S. automotive industry sold $783 million of equity on May 25, according to data compiled by Bloomberg. Freescale’s most active bonds trade above face value.

Copyright 2016 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Comments

Advertisement. Closing in 15 seconds.