(Reuters) – Moody’s cut Intel’s senior unsecured rating on Thursday to BAA1 from its previous A3 rating, citing concerns about the chipmaker’s profitability.
The outlook for unsecured credit ratings has changed to negative from stable, Moody’s said. It affirmed Intel’s Prime-2 short-term corporate bond rating.
The downgrade, along with a change in outlook to negative, indicated pressure on Intel’s credit profile in the short term.
“The downgrade reflects our expectations for Intel’s significantly weaker profitability over the next 12 to 18 months,” Moody’s said.
It expects Intel’s total debt-to-interest, taxes, depreciation and amortization ratio to “approach 7x” by the end of 2024 and return to 4x by 2025.
Intel currently has a total debt-to-EBITDA ratio of 4.35 for the trailing 12 months, according to LSEG data.
(Reporting by Arsheeya Bajwa in Bengaluru and Max A. Cherney in San Francisco; Editing by Anil D’Silva and Pooja Desai)