Summary
Flextronics International Ltd. (FLEX) announced on March 31, 2014, the entry into a new $2.0 billion Credit Facility, which replaced its existing credit agreement. This new facility includes a $1.5 billion revolving credit facility and a $500 million term loan, with an option to increase commitments by an additional $500 million. The company utilized $500 million of the term loan for working capital and to repay a portion of its previous debt. The new credit facility matures in five years, on March 31, 2019, and offers interest rates based on either a Base Rate or LIBOR, plus applicable margins tied to the company's credit ratings. It is an unsecured facility and includes standard covenants restricting debt incurrence, investments, asset disposals, and dividends, along with financial maintenance covenants such as maximum debt-to-EBITDA and minimum interest coverage ratios. This refinancing aims to provide Flex with enhanced financial flexibility and potentially more favorable borrowing terms.
Key Highlights
- 1Entry into a new $2.0 billion Credit Facility on March 31, 2014.
- 2The new facility replaces the Company's existing credit agreement.
- 3Comprises a $1.5 billion revolving credit facility and a $500 million term loan facility.
- 4Includes an option to increase commitments by up to an additional $500 million.
- 5Maturity date for the new facility is March 31, 2019 (five-year term).
- 6Initial $500 million term loan borrowing used for working capital and to repay existing debt.
- 7The credit facility is unsecured and subject to customary covenants and financial maintenance requirements.