Moody's rates STMicroelectronics bonds A3

Moody's Investors Service said it assigned a provisional A3 rating to the proposed €500 million bonds due February 2013 of STMicroelectronics Finance BV, guaranteed on a senior basis by STMicroelectronics NV.

The agency also said it assigned a negative outlook on concerns related to possible refinancing needs.

The negative outlook also referred to challenges in returning profit margins to the former double-digit range after STMicroelectronics operating margin had fallen to 1.1% in the first half of 2005 and to execution risk related to the restructuring of the company's high European cost base, the agency said.

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