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S&P says KLA-Tencor buyback won't impact ratings

By Associated Press
July 3, 2008 | Comments (0)

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Standard & Poor's Ratings Services said Thursday that its "BBB+" ratings and "Stable" outlook for KLA-Tencor Corp. will not be impacted by the chip manufacturing equipment maker's authorization of the repurchase of 15 million shares.

KLA said Monday that it would buy back the shares through a repurchase program that is effective for the next 15 months.

The ratings service said that though the buyback plan would necessitate a significant use of cash, S&P thinks KLA will keep adequate liquidity since it had about $1.4 billion in pro forma cash and equivalents after issuing $750 million in senior notes in late April.

The ratings service also said the company's free operating cash flows are healthy and that its financial policies are fairly conservative.

KLA shares fell 41 cents to finish the holiday-shortened session at $39.90.

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