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Fitch affirms KLA-Tenor on merger termination
Fitch Ratings said it removed KLA-Tencor Corp. from Rating Watch positive and affirmed the ratings, including the long-term issuer default rating at BBB-.
The outlook is now positive.
The affirmation follows KLA-Tencor's termination of its merger agreement with Lam Research Corp., Fitch said.
The ratings reflect the company's still elevated total leverage on a standalone basis and the positive outlook considers expectations for continued de-leveraging over the next 12- to 24-months from a combination of voluntary debt reduction, which the company articulated it will make a priority, the agency said.
On Oct. 6, KLA-Tencor announced the termination of its merger agreement with Lam due to the U.S. Department of Justice advising KLA-Tencor and Lam it would not continue with a consent decree the parties had been negotiating, Fitch explained.
The agency said it expects continued solid top-line performance for KLA-Tenor through the cycle, driven by secular trends and likely share gains over time.
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