Fitch: AMD's Ratings Unaffected by Proposed Formation of Foundry Joint Venture
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CHICAGO--(BUSINESS WIRE)--
Fitch believes Advanced Micro Devices Inc.'s (NYSE: AMD) announcement that it has agreed to form a foundry joint venture (JV) with ATIC (Advanced Technology Investment Company of Abu Dhabi) for semiconductor manufacturing does not have an immediate impact on the following AMD ratings:
--Issuer Default Rating (IDR) at 'B-';
--Senior unsecured debt at 'CCC/RR6'.
The Rating Outlook is Negative.
While the anticipated transaction will improve AMD's liquidity position by approximately $1 billion and likely strengthen the remaining company's operating profile, the current ratings and Negative Rating Outlook continue to reflect the weakened macroeconomic environment and Fitch's expectations for a weaker sales outlook for AMD over the remainder of 2008 and 2009.
Over the coming weeks Fitch expects to gain further clarity to the structure of the JV and the company's financial results. Depending on satisfactory conclusion to these items, Fitch believes the ratings could be stabilized upon completion of the transaction. Over the long term, the consummation of the JV could have a positive impact on the company's ratings due to an improved financial and operating profile and success in achieving market share targets and cash flow measures, which could be strengthened by meaningfully lower capital spending.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
Source: Fitch Ratings
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