S&P cuts Teradyne senior unsecured note rating

Standard & Poor's Ratings Services said that it lowered its corporate credit and senior unsecured note ratings on Teradyne Inc. to 'B+' from 'BB-'. The action recognizes continued stressed conditions in the semiconductor capital goods industry that are likely to impede the company's ability to restore operating profitability over the intermediate term.The outlook was revised to stable from negative on the Boston, Mass.-based Teradyne, which supplies the semiconductor testing industry. Teradyne had debt outstanding of $545 million, including capitalized leases, as of September 2002."Teradyne's good industry position and current liquidity should provide a degree of near-term downside ratings protection during the currently stressed phase of the semiconductor capital goods industry," said Standard & Poor's credit analyst Bruce Hyman.R&D expenses must remain high (currently 25% of sales) to support product-development initiatives.Recognizing stressed markets, Teradyne has been reducing its workforce and expects further restructuring activities.