Integrated circuit products manufacturer Atmel Corporation (ATML) recently closed a revolving credit facility in order to augment its liquidity. The five-year $300 million senior secured credit facility is obtained from a consortium of lenders led by Morgan Stanley Senior Funding, Inc., a subsidiary of Morgan Stanley (MS). Morgan Stanley Senior Funding, Inc. will also serve as the administrative agent on the facility.
The credit facility will bear interest at LIBOR or at base rate with an applicable margin depending on Atmel's total leverage ratio. Atmel will utilize the borrowing capacity of the credit facility for general corporate purposes, including working capital management, stock repurchases, and acquisitions.
Atmel is increasingly focusing on its core microcontroller business as it aims to target high-growth businesses. These controllers deliver high performance and lower power consumption and are also claimed to be more effective than other available variants in the market. The increased liquidity will likely enable to earmark more funds for R&D initiatives to develop technologically updated products.
The fast growing touch-sensing technology is one of the major growth drivers for Atmel's microcontroller business. The phenomenal growth of microcontrollers is driven by a widespread adoption of touchscreens and touchpads. The new product line of Atmel is an initiative to capitalize on this growing market.
Based in San Jose, CA, Atmel designs, develops, manufactures and sells integrated circuit (IC) products. These products include microcontrollers, advanced logic, mixed-signal, non-volatile memory and radio frequency (RF) components. Atmel produces non-volatile memory that stores information after power is turned off and combines this with microcontrollers, digital signal processors and other logic to meet the needs of its customers.
Atmel currently has a Zacks Rank #3 (Hold). Other stocks that look promising and are worth considering in the industry include Ambarella, Inc. (AMBA) and Cabot Microelectronics Corp. (CCMP), both carrying a Zacks Rank #2 (Buy).
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