From the news wire, so there's no link:
The following is a press release from Standard & Poor's :
-- U.S. semiconductor producer Advanced Micro Devices (AMD) is issuing
$300 million senior unsecured notes due 2022.
-- We anticipate revenue and margin declines over the next several
quarters will result in higher leverage.
-- We are revising our rating outlook on the company to negative from
stable, and affirming our 'BB-' corporate credit rating, and assigning our
'BB-' issue rating and '3' recovery rating to the new notes.
-- The negative outlook reflects decreasing near-term operating
performance, macroeconomic headwinds, and increased leverage.
NEW YORK ( Standard & Poor's ) Aug. 6, 2012 -- Standard & Poor's Ratings Services
said today that it revised its rating outlook on Advanced Micro Devices Inc.
(AMD) to negative from stable. We also affirmed our 'BB-' corporate credit
rating on the company.
At the same time, we assigned our 'BB-' issue-level rating to AMD's proposed
$300 million senior unsecured notes due 2022.
"The outlook revision reflects our view of the company's prospects for
near-term operating weakness and its plan to refinance its August 2012 notes
maturity, resulting in our anticipation of higher leverage over the next 12
months," said Standard & Poor's credit analyst John Moore .
The proposed notes will rank equally with all of AMD's existing and future
senior unsecured debt. The company intends to use the proceeds from this
offering, along with available cash, to refinance all of its $485 million
outstanding senior unsecured convertible notes maturing Aug. 15, 2012 .
The 'BB-' corporate credit rating reflects AMD's "weak" business risk profile,
characterized by intense competition from Intel Corp. and the threat of
competition from ARM-based (a type of computing instruction set) competitors,
partly offset by the company's moderately leveraged balance sheet at this
point, which we characterize as a "significant" financial risk profile. The
ratings also reflect the company's "adequate" liquidity.
The outlook is negative, reflecting decreasing near-term operating performance
and increased leverage. A downgrade could result from a number of
developments, including protracted lower demand, erosion of market share, or
weaker manufacturing execution. Any of these scenarios could weaken the
financial profile that supports the rating. Specifically, we would consider a
lower rating if liquidity fell below $1 billion or if leverage were to be
sustained above 3x. We would consider an outlook revision to stable if
leverage was on a trajectory to be sustained in the mid-2x range. |
