Spanish Rating Confirmed, ASML to Acquire Cymer for

Arthi Gupta
17 Oct, 2012
New York City

The European indexes rose and Moody''s confirmed Spanish bond rating but with a negative outlook. Hungary announced new austerity measures to curtail deficit. ASML agreed to acquire Cymer for

[R]3:30 PM Frankfurt – The European indexes rose and Moody''s confirmed Spanish bond rating but with a negative outlook. Hungary announced new austerity measures to curtail deficit. ASML agreed to acquire Cymer for €1.95 billion.[/R]

European indexes edged higher and Moody''s Investors Service confirmed Spain''s Baa3 government bond rating but assigned a negative outlook. The pressure mounted on Spain to finalize its bailout request which the government has been resisting.

The rating agency said that Spain’s access to sovereign market may be cut-off and may be materially reduced by the lack of willingness of the European Central Bank to undertake outright purchases of Spanish bonds unless the government requests the help.

The rating agency believes that Spain will likely apply for a precautionary credit line from the European Stability Mechanism and entry into an ESM precautionary program would not in itself lead to a downgrade as long as the rating agency believes that the government is likely to retain access to private capital markets.

German Chancellor Angela Merkel reiterated that Greece must remain part of the euro zone. Separately, German economy ministry lowered Germany’s outlook for growth next year to 1% from 1.6%.

Hungary Announces New Austerity Measures

Hungary''s Economy Minister Gyorgy Matolcsy unveiled fresh austerity measures of 367 billion forints aimed at reducing the budget deficit below 3% of gross domestic product in 2013.

The government has initiated other measures that include doubling the financial transactions tax to 0.2% from 0.1% and higher taxes on employee benefits.

The minister lowered growth outlook for 2013 to 0.9% from 1% previously.

In Paris trading, the CAC-40 Index rose 7.19 or 0.2% to 3,508.45 and in Frankfurt the DAX Index edged higher 3.17 or 0.04% to 7,379.69.

The yields on Spain’s benchmark 10-year declined 26 basis points to 5.55%. Italian 10-year yields fell 10 basis points to 4.84%.

ASML to Acquire Cymer

ASML Holding NV, the lithography systems for the semiconductor industry provider agreed to acquire all outstanding shares of Cymer, Inc. in a cash-and-stock transaction currently valued at €1.95 billion.

Statoil and Statkraft Acquire DOW Power Project

Statoil ASA, the Norwegian integrated energy company and Statkraft planned to work together to develop the Dudgeon Offshore Wind Farm, a subsidiary of the UK energy company Warwick Energy Limited.

Statoil will hold a 70% share and Statkraft a 30% share in DOW.