8-KOther EventsExhibits & Filings

FLEX LTD. 8-K Report, Corporate Update (Jul 1, 2009)

Filed July 1, 2009For Securities:FLEX

Summary

Flextronics International Ltd. (FLEX) filed an 8-K on July 1, 2009, to report the results of its cash tender offer for its 6 1/2% Senior Subordinated Notes due 2013 and its 6 1/4% Senior Subordinated Notes due 2014. The company announced that it had received sufficient consents to amend the indentures governing these notes, specifically related to restricted payments covenants. This indicates a proactive move by the company to manage its debt obligations and potentially gain more financial flexibility. The tender offer aimed to purchase up to $100,000,000 in aggregate principal amount for each series of notes. The company also stated its intention to deposit all amounts due on July 1, 2009, at which point the indenture amendments would become effective. This filing is important for investors as it signals a significant debt restructuring event, potentially impacting the company's leverage and future financial strategies.

Key Highlights

  • 1Flextronics completed a cash tender offer for its 6 1/2% Senior Subordinated Notes due 2013 and 6 1/4% Senior Subordinated Notes due 2014.
  • 2The tender offer had a maximum aggregate principal amount of $100,000,000 for each series of notes.
  • 3The company obtained consents from a majority of noteholders to amend the restricted payments covenants in the indentures.
  • 4Supplemental indentures were executed to incorporate these amendments.
  • 5Flextronics expected to deposit all payment amounts on July 1, 2009.
  • 6The amendments to the indentures became effective upon the deposit of funds.
  • 7This action suggests a move to increase financial flexibility by modifying debt covenants.

Frequently Asked Questions

The tender offer and consent solicitation were conducted to allow Flextronics to repurchase a portion of its outstanding senior subordinated notes and to amend the covenants related to restricted payments within the indentures governing these notes. This aims to provide the company with greater financial flexibility.

The debt instruments involved were the 6 1/2% Senior Subordinated Notes due 2013 and the 6 1/4% Senior Subordinated Notes due 2014.

Amending restricted payments covenants can provide the company with more latitude to make certain financial actions, such as dividends, share repurchases, or other distributions, which might otherwise have been limited under the original indenture terms.

Flextronics intended to purchase up to $100,000,000 of aggregate principal amount for each of the two series of notes, meaning a potential total outlay of up to $200,000,000 for the tender offer component.