Moody's downgrades Stats ChipPAC

Moody's Investors Service said it downgraded Stats ChipPAC Ltd.'s corporate family rating and senior bond ratings to B1 from Ba3. The outlook is negative.

This concludes the review for downgrade that began in November 2014 following JCET-SC (Singapore) Pte. Ltd.'s cash offer to acquire all shares in Stats ChipPAC. JCET-SC is a subsidiary of Jiangsu Chiangjiang Electronics Technology Co., Ltd.TD (JCET, unrated), a leading semiconductor packaging and testing company in China.

The agency said the downgrade reflects Stats ChipPAC’s weakening operating performance, refinancing risk associated with Stats ChipPAC's debt restructuring and the complex funding and ownership structures associated with the acquisition by JCET-SC.

“We downgraded Stats ChipPAC's ratings by one notch to B1 to reflect the company's weakening operating performance through 1H2015. Moreover, given the company's high fixed cost structure and lack of clear near-term catalysts for revenue growth, we expect profitability to remain muted and adjusted debt/EBITDA to climb to 4.0-4.5x for FYE2015," Annalisa DiChiara, a Moody's vice president and senior analyst, said in an agency news release.

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