Moody's raises Cohu

Moody's Investors Service said it raised Cohu, Inc.'s ratings, including the corporate family rating to B1 from B2 and the senior secured rating to Ba3 from B2.

The upgrade follow's Cohu's repayment of about $100 million of the senior secured term loan using the proceeds of the divestiture of Cohu's printed circuit board test business, Moody’s said. The repayment reduced reported debt by about 45%.

“Though the PCB test business has historically been more profitable than the remainder of Cohu's operations, Moody's estimates that the divestiture and debt repayment has improved leverage from 2.2x debt to EBITDA (12 months ended March 27, 2021, Moody's adjusted) to just under 1.5x (12 months ended March 27, 2021, pro forma for the repayment and divestiture, Moody's adjusted),” the agency said in a press release.

“The upgrade also reflects the improved operating profile driven by the recovery in the automotive and industrial end markets and benefit of strong secular growth in the mobile end market driven by the rollout of 5G smartphones,” Moody’s said.

The outlook remains stable.

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