Merger talk rattles STATS ChipPAC bond investors

Worry over Temasek's potential sale of stake in chip-tester

SINGAPORE investment company Temasek Holdings' potential sale of its stake in chip-tester STATS ChipPAC is rattling bond investors.

The yield on the semiconductor company's US dollar-denominated 2016 notes has surged 24 basis points to 4.28 per cent since Aug 26 amid reports that it was in merger talks with two Chinese chip-testers. STATS ChipPAC is majority-owned by Temasek, which nurtured the development of Singapore's semiconductor industry for over two decades.

STATS ChipPAC is Temasek's last major chip-market holding after its 2009 sale of Chartered Semiconductor Manufacturing , as the firm steers its assets towards higher-returning Internet and media companies such as Alibaba Group Holding....

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