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Investing.com -- Analog Devices Inc (NASDAQ:ADI). received fresh credit assessments for its latest senior notes offering, with Moody’s Ratings assigning an A2 rating, Fitch Ratings assigning an ’A’, and S&P Global Ratings giving an ’A-’. Rating agencies cited the company’s strong financial profile, leadership in analog semiconductors, and diversified operations as primary factors behind the favorable credit views.
Moody’s noted the new issuance would temporarily lift debt leverage to 2.1x from 1.8x but viewed the impact as manageable due to high cash reserves and near-term repayment plans for 2026 and 2027 maturities. “Although the issuance will temporarily increase gross financial leverage, the cash balance will likewise increase,” the agency said in its credit opinion.
Fitch’s commentary pointed to Analog Devices’ “conservative financial policies” and expected leverage within the 1.0x to 1.5x range over the forecast horizon. The agency expects the issuance to be leverage neutral as $1.3 billion of existing maturities are scheduled over the next two years.
S&P affirmed its issuer credit rating at ‘A-’ with a positive outlook and assigned the same grade to the new unsecured notes, noting that the new debt would be “net leverage neutral.” The agency emphasized Analog’s recent performance, including a gross margin of 69.4% and operating margin of 41.2% on a quarterly revenue of $2.64 billion, signaling sustainable recovery following years of inventory correction in the industrial segment.
The firms all commended Analog Devices for its operational and end-market diversification, particularly in automotive and industrial segments. Fitch emphasized nearly 75% of total sales stem from these two more stable and fragmented sectors, mitigating volatility even amid macro uncertainty.
Market observers say the positive ratings provide financial flexibility as the company continues shareholder capital returns and targets mid-single-digit revenue growth. S&P expects continued annual growth and stated it would consider an upgrade if Analog maintains sub-2x leverage and free operating cash flow to debt above 25%.
All three rating agencies cited Analog Devices’ strong liquidity, with a current cash balance over $2 billion and access to a $3 billion undrawn credit facility. Fitch added that the firm "can easily manage debt maturities through the forecast period with $1.0 billion to $2.0 billion of expected annual free cash flow."
The coordinated A-grade ratings across agencies reflect growing confidence in Analog Devices’ capital stewardship and operational resilience as it enters a product upcycle in analog and custom silicon markets. That endorsement could enhance the company’s standing among debt investors as it prepares for its next phase of strategic investments and repayments.
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