Summary
Flex Ltd. (FLEX) announced on July 18, 2025, the execution of a new $2.75 billion Credit Agreement, effective July 15, 2025. This new facility replaces the company's previous $2.5 billion credit line, which was set to mature in July 2027. The enhanced revolving credit facility, with a maturity of five years (July 15, 2030), provides greater financial flexibility and liquidity for the company. It includes a sublimit for swing line loans and letters of credit, and importantly, allows for potential increases of up to $500 million in incremental term loan or revolving commitments, subject to lender commitments and other conditions. This refinancing demonstrates proactive capital management by Flex, securing a larger and longer-term credit facility. The agreement is unsecured and includes covenants related to debt incurrence, acquisitions, liens, leverage ratios (total indebtedness to EBITDA), and interest coverage, which are standard for such agreements and are subject to specified exceptions. Investors should note that the new facility is not guaranteed by any subsidiary, and certain lenders or their affiliates have ongoing relationships with Flex, which is typical in the financial industry.
Key Highlights
- 1Flex Ltd. has entered into a new $2.75 billion Credit Agreement, replacing its previous $2.5 billion facility.
- 2The new Credit Facility matures on July 15, 2030, providing a five-year term.
- 3The facility includes a $2.75 billion revolving credit line with sublimits for swing line loans ($400 million) and letters of credit ($200 million).
- 4Flex has the option to increase the facility by up to $500 million through incremental term loans or revolving commitments.
- 5The new credit agreement is unsecured.
- 6Key financial covenants include maintaining a maximum total indebtedness to EBITDA ratio and a minimum interest coverage ratio.
- 7The previous $2.5 billion Credit Agreement dated July 19, 2022, has been terminated as of the execution of the new facility.