Fitch upgrades ASML, assigns BB+ to convertibles

Fitch Ratings said it upgraded ASML Holding NV's issuer default rating to BB+ from BB-. The agency also assigned ASML's €380 million 5.5% subordinated convertible notes due 2010 a BB+ rating. While the notes are subordinated to all senior debt, Fitch said that nearly all of the company's third-party debt is made up of subordinated convertible debt.

The outlook remains positive.

Fitch said the upgrade reflects the company's improving operating and financial performance, which is evident in its solid earnings, robust cash flows and well-capitalized balance sheet. The ratings also reflect the buoyant industry conditions in lithography expected over the next three years.

Negative factors affecting the rating include the company's somewhat limited scale and lack of product diversification, as well as the volatility of capital equipment markets, the agency said.

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