S&P affirms STMicro ratings, takes off CreditWatch

Standard & Poor's Ratings Services said Tuesday that it affirmed the "A-" long-term corporate credit rating and the senior unsecured debt ratings it holds for STMicroelectronics NV and removed the company from CreditWatch.

S&P had placed the ratings on CreditWatch with negative implications on April 11 after the Switzerland-based chip maker said it would combine its wireless operations with those of NXP Semiconductors.

In April, STMicro said it would pay NXP $1.55 billion for an 80 percent stake in the joint venture.

S&P credit analyst Matthias Raab said in a statement that despite the payment STMicro must make to NXP, "its financial profile remains robust for the ratings."

S&P said the affirmation follows its expectation that STMicro will lower its debt or increase its liquidity reserves by the end of 2009.

The outlook S&P holds for the company remains at "Negative" due to the risk of a downgrade if the company doesn't improve its financial profile after making the payment to NXP in the second half of 2008, Raab said.