Moody's issued an upgrade Friday to Advanced Micro Devices, Inc.'s (NASDAQ:AMD) credit rating.
What Happened: Moody's upgraded AMD's senior unsecured rating by three notches from Ba3 to Baa3 and withdrew AMD's corporate family rating of Ba2, Ba-2 probability of default rating and SGL-1 speculative grade liquidity. The outlook was revised from positive to stable.
"In addition to Moody's expectations of strong operating performance and balanced financial policies, the upgrade of the senior unsecured rating to Baa3 also reflects the release of security on the company's previously secured $500 million credit facility," Moody's said.
Why It's Important: Baa3 is an investment grade rating for a debt instrument, although it is the lowest. Moody's previously rated at Ba3, suggesting it was below investment grade.
An investment grade rating is important, as it suggests a low risk of credit default, making it an attractive investment option for risk-averse investors.
What's Next: Anticipation is building for the launch of AMD's new CPU and GPU architectures in October.
AMD shares were trading down 2.33% to $77.14 at last check Friday.