Summary
Flextronics International Ltd. (FLEX) announced on November 17, 2004, the issuance of $500 million aggregate principal amount of 6¼% Senior Subordinated Notes due 2014. These notes were placed with qualified institutional buyers and offered outside the United States, indicating a significant capital raise to manage its debt structure and fund general corporate purposes. The proceeds are intended to reduce outstanding debt under existing credit facilities and support working capital, acquisitions, and capital expenditures. The notes are unsecured and subordinate to existing and future senior debt, with specific covenants restricting debt incurrence, liens, dividends, and investments. The issuance represents a strategic move by Flextronics to strengthen its financial flexibility and support its growth initiatives.
Key Highlights
- 1Issuance of $500 million in 6¼% Senior Subordinated Notes due November 15, 2014.
- 2Notes offered to qualified institutional buyers (Rule 144A) and outside the U.S. (Regulation S).
- 3Proceeds to be used for repaying outstanding debt under revolving credit facilities and for general corporate purposes.
- 4Notes are unsecured and rank senior subordinated, subordinate to senior debt, and effectively junior to subsidiary debt.
- 5Indenture includes covenants restricting additional debt, liens, dividends, investments, and affiliate transactions.
- 6A 'change of control' event triggers an offer to repurchase notes at 101% of principal plus accrued interest.
- 7Flextronics has the option to redeem notes starting November 15, 2009, with specified premiums, and also has a 'make-whole' redemption option using equity offering proceeds before November 2007.