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Moody's cuts STMicroelectronics to negative
Moody's Investors Service said it has changed the outlook on the Baa2 senior debt rating of STMicroelectronics Finance BV to negative from stable.
Concurrently, Moody's said it has affirmed the existing senior debt rating and assigned a long-term Baa2 issuer rating with a negative outlook to STMicroelectronics NV, the ultimate parent of STMicroelectronics Finance.
The Baa2 rating on the €500 million of senior unsecured notes due March 17, 2013 - of which €350 million is currently outstanding - issued by STMicroelectronics Finance BV is based on the guarantee provided to STMicroelectronics in favor of the outstanding debt, the agency stated.
"The negative outlook on STMicroelectronics' Baa2 ratings reflects STMicroelectronics' core business' comparatively low operating margins (in the low single digits in percentage terms), even when excluding the loss-making wireless segment and adjusting for impairment and restructuring charges in 2012," said Kathrin Heitmann, Moody's lead analyst for STMicroelectronics.
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