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Technology Stocks : STM - SGS-Thomson (MPEG II)
STM 24.47-0.9%3:59 PM EDT
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From: Savant11/4/2014 10:32:48 AM
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Fitch Solutions-New York-04 November 2014: STMicroelectronics N.V.'s five-year Credit Default Swaps (CDS) have widened 39% over the past month to trade at the widest levels observed in nearly two years, according to Fitch Solutions in its latest case study.

CDS widening for the multinational electronics and semiconductor manufacturer outpaced the broader European Technology CDS Index, out just 6% over the past month. After pricing in the 'BBB+/BBB' space over the past year, the price of credit protection on STMicroelectronics' debt is testing below investment grade levels.

"Increasing market scrutiny for STMicroelectronics is likely attributed to a decline in third quarter revenues and lowered guidance for the last quarter, as investors weigh whether the company can adjust its cost base in a timely manner as revenue and volumes come under pressure," said Diana Allmendinger, Director, Fitch Solutions.

Fitch Solutions case studies build on data from its CDS Pricing Service and proprietary quantitative models, including CDS Implied Ratings. These credit risk indicators are designed to provide real-time, market-based views of creditworthiness. As such, they can and often do reflect more short term market views on factors such as currencies, seasonal market effects and short-term technical influences. This is in contrast to Fitch Ratings' Issuer Default Ratings (IDRs), which are based on forward-looking fundamental credit analysis over an extended period of time.

Additional information about Fitch Solutions' products is available at www.fitchsolutions.com.
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