S&P downgrades Stats ChipPAC

Standard & Poor’s said it lowered the long-term corporate credit rating and long-term issue rating on Stats ChipPAC Ltd. to BB from BB+.

The agency also said it lowered the company’s long-term Asean regional scale rating to axBBB- from axBBB+.

The outlook is stable.

The ratings also were removed from CreditWatch, where they were placed with negative implications in November 2014.

The downgrades consider a view that its major shareholder Temasek Holdings (Pvt.) Ltd. is likely to sell its 83.8% ownership in Stats ChipPAC soon, the agency said.

The company’s BB stand-alone credit profile is unchanged, S&P added.

Jiangsu Changjiang Electronics Technology announced June 26 that it received all necessary approvals from shareholders and relevant authorities for its proposed cash acquisition of Stats ChipPAC for $780 million, the agency said.

The acquisition process is at a very advanced stage, so the agency said it removed the government support factor from the company’s ratings.

The strategic importance of the technology industry to the Singapore government is considered less significant than before, S&P said.

The link between the government and the company also is viewed limited given the high likelihood of Temasek’s divestment, the agency said.

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