Summary
Flextronics International Ltd. (now Flex Ltd.) filed an 8-K on February 22, 2013, to report a significant debt financing transaction completed on February 20, 2013. The company successfully issued and sold $1 billion in aggregate principal amount of senior unsecured notes, split equally between 4.625% Notes due 2020 and 5.000% Notes due 2023. This offering was conducted through a private placement to qualified institutional buyers and non-U.S. persons. The primary purpose of this debt issuance was to refinance existing debt. The company utilized the approximately $990.6 million in net proceeds from the Notes Offering, along with $9.4 million of cash on hand, to fully repay a $1 billion outstanding borrowing under its 2007 term loan facility, which was set to mature in October 2014. This proactive debt management aims to extend the company's debt maturity profile and potentially reduce borrowing costs.
Key Highlights
- 1Completed a $1 billion private placement of senior unsecured notes: $500 million of 4.625% Notes due 2020 and $500 million of 5.000% Notes due 2023.
- 2The notes were issued to "qualified institutional buyers" and non-U.S. persons via Rule 144A and Regulation S.
- 3Net proceeds of approximately $990.6 million were raised from the notes offering.
- 4The proceeds were used to repay $1 billion of outstanding borrowings under the 2007 term loan facility.
- 5The 2007 term loan facility was scheduled to mature in October 2014, indicating a proactive debt refinancing strategy.
- 6The notes are guaranteed by certain subsidiaries of the company.
- 7The Indenture includes covenants restricting liens, sale-leaseback transactions, funded debt incurrence, and mergers/consolidation, subject to exceptions.