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Fitch lifts Jabil Circuit from junk
Fitch Ratings said it upgraded the issuer default and outstanding debt ratings for Jabil Circuit, Inc. to BBB- from BB+, senior unsecured revolving credit facility to BBB- from BB+ and senior unsecured debt to BBB- from BB+.
The outlook is stable.
The change reflects expected revenue growth of mid-single digits beyond fiscal 2010, or roughly 2 times global GDP growth, as Jabil benefits from the secular trend of increased outsourcing of manufacturing, the agency said.
Fitch said it expects total debt to total operating EBITDA to remain below 2x going forward and under 3x when adjusted for off-balance sheet accounts receivable securitization and operating leases.
Ratings are supported by strong management team, advantages in scale and significant working capital balance, the agency said.
Concerns include need for vertical integration, industry pricing pressure and significant execution risks, the agency noted.
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