Moody's on May 21 upgraded Micron Technology Inc.'s ratings on expectations that the company will reduce reported debt to less than $8 billion in the near term.
The upgraded ratings include corporate family rating to Ba1 from Ba2 and senior unsecured bonds to Ba2 from Ba3. The rating outlook remains positive.
Moody's expects the company's debt to EBITDA to stay below 2x and reported EBIT to remain positive throughout the next memory industry cycle. Micron Technology builds memory and semiconductor technologies.
The corporate family rating reflects a conservative financial policy and strong free cash flow generation, which Moody's expects will exceed $4 billion over the next year. The rating also reflects Micron's substantial scale and its No. 3 market position in the memory industry.
The rating is backed by Micron's "very good" liquidity.
"The maintenance of very strong liquidity and a conservative financial policy is prudent given the memory industry's capital intensity and rapid economic obsolescence," Moody's said.
The positive outlook reflects Moody's expectation that Micron will continue to use free cash flow for debt repayment and will reduce the share of secured debt in the debt capital structure over the next year.
