International rating agency Standard & Poor's (S&P) has assigned a first-time long-term credit rating to Infineon Technologies. S&P rates the company 'BBB' (outlook: stable).According to Infineon, this means it currently holds the highest S&P rating for a European semiconductor manufacturer. It says: "The analysis acknowledges Infineon's above-industry-average growth and its leading position in several market segments, as well as its strong financial profile. The latter also reflects Infineon's adjusted capital structure targets: in future, gross liquidity should be 1 billion euros and additionally 10 to 20% of revenue. The upper limit for gross financial debt of no more than two times EBITDA continues to apply."The previous target range for gross liquidity, which was defined in 2010, amounted to 30 to 40% of revenue. The new liquidity target takes into account Infineon's revenue growth and increased profitability. The aim of the base amount of 1 billion euros is keeping a solid liquidity reserve for contingent and pension liabilities, which are independent of revenue. The additional 10 to 20% of revenue are intended to ensure at all times the availability of sufficient cash for financing operations throughout the cycle irrespective of the prevailing capital market environment.""With this rating, Standard & Poor's is confirming our investment grade status, which already served as the basis for deriving our previous capital structure targets," says Dominik Asam, CFO, Infineon. "The credit rating will provide us with higher flexibility in complementing our strategy of organic growth with potential acquisitions – where it makes good business and financial sense."Infineon says it already successfully issued two bonds in 2015 without a formal rating. The rating provides access for Infineon to a wider range of potential investors, which should lead to improved financing terms for future debt issuances.
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