Moody's rates Amkor notes Caa1, convertibles Caa3

Moody's Investors Service said it assigned a Caa1 rating to Amkor Technology Inc.'s new $300 million senior unsecured notes due 2016, a Caa3 rating to the company's new $150 million convertible senior subordinated notes due 2011 and affirmed the company's existing ratings, including its B3 corporate family rating, B2 second-lien term loan and SGL-3 speculative grade liquidity rating. The outlook is stable.

The agency said the ratings reflect the challenges, given the company's current debt levels and cost structure, to withstand the dramatic swings inherent in the OSAT business. Moody's said it believes Amkor remains challenged to generate sufficient operating cash flow to comfortably service its significant debt load during cyclical downturns.

The recent industry upturn, coupled with growing demand for Amkor's advanced packaging, wafer bumping and wafer level processing solutions, have alleviated liquidity concerns as margins have expanded and the company generated positive free cash flow for the second straight quarter in the last twelve quarters, Moody's said. The ratings also reflect the relative positions of the securities in the debt structure.

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