Moody's downgrades NXP

Moody's Investors Service said it downgraded NXP Semiconductors' corporate family and probability-of-default ratings to B2 from B1, senior secured notes to B2 (LGD3, 46%) from Ba3 (LGD3, 42%) and senior unsecured notes to Caa1 (LGD5, 88%) from B3 (LGD5, 87%).

Ratings were placed on review for further downgrade.

The action reflects NXP's disappointing second-quarter results indicating a reversal of its improving profitability trend and increasing cash consumption against an eroding cash position, according to the agency.

Moody's noted the downgrade of the corporate family rating led to a two-notch downgrade of the senior secured notes to B2 (LGD3, 46%) due to an increasing level of accounts payable compared with June 2007 and the drawdown of the secured credit facility, which was ranked ahead of bond obligations.

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