8-KOther EventsExhibits & Filings

FLEX LTD. 8-K Report, Corporate Update (Dec 1, 2022)

Filed December 1, 2022For Securities:FLEX

Summary

Flex Ltd. (FLEX) announced on November 30, 2022, that it has entered into an underwriting agreement to sell $400 million in aggregate principal amount of its 6.000% Notes due 2028. The offering is expected to close around December 7, 2022. This action is primarily aimed at refinancing existing debt. The company plans to use the net proceeds from this new note issuance, along with available cash, to fund the redemption of its $500.0 million in 5.000% notes due February 2023. This move signals a proactive approach to managing its debt profile, potentially lowering interest expenses or extending maturity dates. Any remaining proceeds will be allocated for general corporate purposes, including further debt repayment, working capital, capital expenditures, or acquisitions.

Key Highlights

  • 1Flex Ltd. is issuing $400 million of new 6.000% Notes due 2028.
  • 2The primary purpose of the new issuance is to redeem $500 million of existing 5.000% Notes due February 2023.
  • 3This debt refinancing is expected to occur with a closing date around December 7, 2022.
  • 4The company is proactively managing its debt maturity profile.
  • 5Underwriters include major financial institutions: Barclays Capital Inc., BNP Paribas Securities Corp., BofA Securities, Inc., and U.S. Bancorp Investments, Inc.
  • 6Remaining proceeds, if any, will be used for general corporate purposes, including debt reduction, working capital, capital expenditures, and acquisitions.
  • 7Certain underwriters or their affiliates may hold the 2023 notes and will benefit from the redemption.

Frequently Asked Questions

Flex Ltd. has entered into an underwriting agreement to issue $400 million of new 6.000% Notes due 2028. The primary goal is to refinance existing debt.

The net proceeds will be used to redeem $500 million of the Company's 5.000% notes due February 2023. Any leftover funds will be applied to general corporate purposes, such as repaying other debt, working capital, capital expenditures, or acquisitions.

The offering is expected to close on or about December 7, 2022. The company has already issued a notice to redeem its 2023 notes on December 20, 2022, indicating a planned execution of the refinancing around these dates.

While not explicitly stated as a cost-saving measure in this filing, refinancing a debt with a higher coupon (6.000%) to redeem a debt with a lower coupon (5.000%) might suggest other strategic reasons for the transaction, such as extending the debt maturity or managing cash flow. Investors should review the company's upcoming financial statements for a detailed impact analysis on interest expenses and debt structure.