Moody's Upgrades AMD; Intel Deal Will Boost AMD's Liquidity |
| Wall Street Journal - Nov 16, 2009 |
Moody's Investors Service upgraded Advanced Micro Devices Inc. (AMD) and said additional increases are possible in the wake of the company's $1.25 billion legal settlement with rival semiconductor maker Intel Corp. (INTC).
The payment from Intel will "provide a significant boost to AMD's liquidity," ease its "over-levered capital structure" and allow it to operate more efficiently. The rivals last week declared peace, announcing the settlement in which all existing legal battles between the two companies are wiped out. In addition to the payment, the settlement also sets new rules for how Intel conducts its business.
Part of the payment will go toward debt reduction at AMD, which Moody's noted has about $1.9 billion due in 2012.
AMD was raised to B2, five notches below investment grade, and the ratings outlook is positive. Besides the Intel payment, Moody's also highlighted the March spinoff of AMD's manufacturing operations into a joint venture. That eliminates the "burdens of significant" capital spending.
Read Full Article from Wall Street Journal
- Posted: 2009-11-16 10:46:27
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