S&P lifts Lam Research

Standard & Poor's said it raised the ratings on Lam Research Corp. to BBB- from BB+ and removed the rating from CreditWatch, where it was listed with positive implications in December.

The outlook is positive.

The upgrade reflects the company's expanded leadership position beyond its previously narrow business focus to include adjacent markets within the wafer fabrication equipment industry, S&P said, while maintaining its intermediate financial risk profile after the stock-for-stock merger with Novellus.

S&P also said it will upgrade the ratings on the company's $450 million senior unsecured convertible bonds due 2016 and $450 senior unsecured convertible bonds due 2018 to BBB- from BB+.

The watch follows news that the company will merge with Novellus Systems Inc. in a stock-for-stock transaction valued at about $3.3 billion or 1.125 shares of Lam Research for each share of Novellus.

The agency said it views the proposed merger as a positive for Lam Research's business risk profile as the company expands its leadership positions beyond its previously narrow business focus in plasma etch and single-wafer clean segments of the semiconductor wafer equipment addressable market.

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