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(Reuters) - Moody's downgraded Intel's senior unsecured rating on Thursday to BAA1 from its earlier A3 rating, citing concerns about the chipmaker's profitability. The unsecured ratings outlook has been changed to negative from stable, Moody's said. It affirmed Intel's Prime-2 short-term commercial paper rating. The downgrade, coupled with a change in outlook to negative, highlighted the pressure on Intel's credit profile in the near term. "The downgrade of the ratings reflects our expectations for Intel's significantly weaker profitability over the next 12 to 18 months," Moody's said.
It affirmed Intel's Prime-2 short-term commercial paper rating. The downgrade, coupled with a change in outlook to negative, highlighted the pressure on Intel's credit profile in the near term. "The downgrade of the ratings reflects our expectations for Intel's significantly weaker...
One of the looming problems for Intel's financial standings is the $8.5 billion grants and $11 billion loan from the Chips Act. Chips Act got strong bipartisan support. But Intel is laying off 15,000 to 19,000 people and its financial situation is deteriorating. Not too many politicians from both parties like to be accused of handing out bailout money to Intel during this election year.
That means those taxpayers' money Intel is counting on may get reduced or postponed.
One of the looming problems for Intel's financial standings is the $8.5 billion grants and $11 billion loan from the Chips Act. Chips Act got strong bipartisan support. But Intel is laying off 15,000 to 19,000 people and its financial situation is deteriorating. Not too many politicians from both parties like to be accused of handing out bailout money to Intel during this election year.
That means those taxpayers' money Intel is counting on may get reduced or postponed.
You think pulling the rug from who is literally the largest target of the CHIPS act money in the first place would be a shrewd political move? Kick them while they’re down.
You think pulling the rug from who is literally the largest target of the CHIPS act money in the first place would be a shrewd political move? Kick them while they’re down.
"That means those taxpayers' money Intel is counting on may get reduced or postponed."
With this mass layoff and other difficulties Intel is facing, very few politicians are willing to risk their political future to defend Intel's $8.5 billion grant blindly without asking some accountability.
In the March 20, 2024 announcement, Intel, Commerce Department, and Whitehouse claimed that the $8.5 billion grants and $11 billion loans will support Intel's expansions in four states and to create 30,000 jobs.
Now less than five months later Intel is laying off 15,000 to 19,000 people and cutting down about 20% CapEx. Intel's creditability and truthfulness are in question. Even worst, if Intel didn't lie to US government back in March 2024, then it indicated that Intel senior leadership and CEO Pat Gelsinger have no visibility of the real situation at Intel.
finance.yahoo.com