AMD has bad day at the exchange

Moody's Investors Service announced that it was going to fiddle with the ratings of AMD's 2012 credit notes. The rating went from Ba2 to B2, a change which reflects, according to the firm's long-winded ratings system, a move from 'speculative elements' within the credit to being 'considered speculative' and 'high credit risk'.

Moody's said that the 2012 notes were looking rather less promising after AMD released some of the collateral that was held against the notes, hence the increased speculation about exactly where the money to generate returns on the notes was going to come from.

Ironically, the fact that AMD also partically repaid another of its loans - usually a fairly good financial move - also rather nixed some of the benefit of the 2012 notes. On the flipside, the prospects for creditors of AMD's 1.6bn loan due in 2013 were up, rated from Ba2 to Ba1, which means that loan might just cost AMD a little more than it originally planned.

Meanwhile, Caris and Company kickstarted their coverage of AMD by suggesting that holders of AMD stock start selling it off, with a target price of $10. That's a bad price for the stock, and really isn't the message that AMD is trying to hi the market with, as it battles to get its stock price up towards the $40 required to service the various loans it took out to buy AMD and bail itself out of this year's financial hole.

It's easy to dismiss C&C's downbeat outlook for AMD as simply an outrageous call made in order to get some press coverage. But perhaps even this is indicative of the market's general feeling about AMD - is the market reflecting the rather pessimistic press mood?

Analysts spend a lot of time and effort, and earn a lot of money, covering the financial wranglings of AMD. It's not hard to see why - this myriad of loans and notes and ratings makes AMD's accounts an absolute minefield.

AMD's stock was trading at $13.40 yesterday, down from the high end of $15 two weeks ago. µ