Summary
Flextronics International Ltd. (FLEX) announced on August 30, 2013, the execution of a new $600 million term loan agreement, maturing on August 30, 2018. This new facility was utilized to immediately repay outstanding balances on existing term loans that were scheduled to mature in late 2013 and 2014. The company also has the option to increase the facility by up to $150 million. The new loan is unsecured and bears interest at variable rates based on prime or LIBOR, plus an applicable margin determined by FLEX's credit ratings. Covenants include restrictions on debt, investments, acquisitions, liens, asset disposals, dividends, and affiliate transactions, alongside financial maintenance covenants regarding total indebtedness to EBITDA and interest coverage. Certain subsidiaries provide guarantees for the borrowings.
Key Highlights
- 1FLEX secured a new $600 million unsecured term loan facility on August 30, 2013.
- 2The term loan matures on August 30, 2018, extending its debt maturity profile.
- 3Proceeds from the new loan were used to refinance existing debt due in 2013 and 2014.
- 4The company has the flexibility to request an additional $150 million in borrowings.
- 5Interest rates are variable, based on prime or LIBOR, plus a credit rating-dependent margin.
- 6The agreement includes standard financial covenants (leverage and interest coverage) and restrictive covenants on business activities.
- 7Certain subsidiaries have provided guarantees for the new loan.