September 7, 2009 / 11:31 AM / 8 years ago

Moody's says may cut Chartered Semi's rating

LONDON, Sept 7 (Reuters) - Moody's Investors Service put Chartered Semiconductor's CSMF.SI speculative-grade Ba2 rating on review for a possible downgrade due to its agreed acquisition by Abu Dhabi state-owned investment firm ATIC. [ID:nT37096]

Advanced Technology Investment Co (ATIC) has offered to buy the loss-making Singaporean contract semiconductor company, which makes chips for Microsoft's (MSFT.O) Xbox 360 game console, for $1.8 billion.

"In light of the probable change of the major shareholder, the parent support Moody's has incorporated into Chartered's rating needs to be reassessed," said Ken Chan, a Moody's senior analyst, in a statement on Monday.

Singapore investment agency Temasek owns 62 percent of Chartered Semi, which had lifted Chartered Semi's rating by three notches, Chan said.

"The rating action also reflects Abu Dhabi's sovereign rating of Aa2 relative to Temasek's Aaa rating, which could lead to a reduction of the current three-notch rating uplift," he added.

The acquisition could bring advantages in technology and economies of scale through joining forces with ATIC's companies, including Globalfoundries, a joint venture with Advanced Micro Devices Inc. AMD.N, the agency said.

Nevertheless, "Moody's needs to assess Chartered's strategic importance to ATIC and future strategy to determine the company's likely new level of support," the agency stated. (Editing by David Holmes)

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