8-KMaterial AgreementsFinancial EventsExhibits & Filings

FLEX LTD. 8-K Report, Material Agreement (Feb 22, 2013)

Filed February 22, 2013For Securities:FLEX

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.

Frequently Asked Questions

This Form 8-K filing reports on Flextronics International Ltd.'s completion of a $1 billion senior unsecured notes offering and the subsequent use of proceeds to repay an existing term loan facility. It details the terms of the new notes and the associated legal agreements.

Flextronics issued $1 billion in aggregate principal amount of notes. This consists of $500 million of 4.625% Notes due February 15, 2020, and $500 million of 5.000% Notes due February 15, 2023. These are senior unsecured obligations.

The company used the net proceeds of approximately $990.6 million, along with $9.4 million of cash on hand, to repay the entire $1 billion outstanding balance on its 2007 term loan facility, which was maturing in October 2014.

Yes, the notes are senior unsecured obligations and are guaranteed by certain subsidiaries. The indenture includes covenants that restrict the company and its subsidiaries from creating liens, entering into sale-leaseback transactions, incurring significant funded debt, and consolidating or merging, among other things, subject to certain limitations and exceptions. There are also provisions for redemption, change of control repurchases, and events of default.