Summary
Flextronics International Ltd. (FLEX) filed an 8-K on June 22, 2009, reporting on significant amendments to its indentures governing its 6 1/2% Senior Subordinated Notes due 2013 and 6 1/4% Senior Subordinated Notes due 2014. These amendments, achieved through supplemental indentures executed on June 19, 2009, were made possible by obtaining the necessary consents from noteholders. The primary objective of these changes is to provide the company with greater financial flexibility. Specifically, the amendments will allow Flextronics to more easily engage in activities such as repurchasing its equity securities, making payments on subordinated debt, and executing other restricted payments. Key provisions include restarting the restricted payments calculation period, excluding certain non-cash charges from net income calculations, permitting the redemption of its 1% Convertible Subordinated Notes due 2010, and allowing for an additional $250 million in restricted payments. These changes are intended to support the company's strategic financial management.
Key Highlights
- 1Flextronics International Ltd. entered into Supplemental Indentures for its 6 1/2% and 6 1/4% Senior Subordinated Notes.
- 2The amendments were effective upon execution on June 19, 2009, following receipt of noteholder consents.
- 3The core purpose of the amendments is to grant the company increased flexibility for restricted payments.
- 4This includes the ability to repurchase equity securities and make payments on subordinated debt.
- 5The company can now exclude certain non-cash charges from net income calculations related to restricted payments.
- 6A specific allowance is made to redeem the 1% Convertible Subordinated Notes due August 1, 2010.
- 7An additional $250 million in restricted payments is permitted under the amended indentures.