S&P changes Flextronics outlook to stable

Standard & Poor's said it affirmed its ratings on Flextronics International Ltd. and revised its outlook on the company's ratings to stable from negative, reflecting the settlement of litigation with Beckman Coulter Inc. (BBB/stable/--).

The company's senior secured debt is rated BB+ and subordinated debt is rated BB-.

S&P noted the $23 million settlement amount is substantially lower than the original verdict against Flextronics of $934 million, relieving the need for an appeal and the possibility of a large bonding requirement.

The original verdict included $3 million in contract and tort damages and $931 million in punitive damages. Flextronics had about $700 million in cash balances and an unused $880 million credit facility as of September.

S&P said ratings on Flextronics International reflect a highly competitive industry and the company's prolonged period of low asset-utilization rates. These weaknesses are only partly offset by the company's top-tier industry position, broad geographic scope of operations, and solid long-term customer relationships.

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