Research Update: Korea-Based MagnaChip Semiconductor Upgraded To 'B' On Debt Repayment; Outlook Positive

We believe MagnaChip Semiconductor Corp.'s redemption of its US$224 million senior notes, using proceeds from the sale of its foundry business and its Fab 4 manufacturing facility, will significantly lower its debt leverage. The Korea-based chip maker's scale will remain small, with annual sales of about US$500 million, and customer concentration will increase after the asset disposal. On Oct. 12, 2020, S&P Global Ratings raised its issuer credit rating on MagnaChip to 'B' from 'B-'. The positive outlook reflects our view that the company's significant cash holdings post the asset disposal and likely better profitability could improve its adjusted debt-to-EBITDA ratio to about 3.0x over the next 12 months. We believe MagnaChip's performance will not be as severely hit by

...- We believe MagnaChip Semiconductor Corp.'s redemption of its US$224 million senior notes, using proceeds from the sale of its foundry business and its Fab 4 manufacturing facility, will significantly lower its debt leverage. - The Korea-based chip maker's scale will remain small, with annual sales of about US$500 million, and customer concentration will increase after the asset disposal. - On Oct. 12, 2020, S&P Global Ratings raised its issuer credit rating on MagnaChip to 'B' from 'B-'. - The positive outlook reflects our view that the company's significant cash holdings post the asset disposal and likely better profitability could improve its adjusted debt-to-EBITDA ratio to about 3.0x over the next 12 months....

Research Update