Flextronics International enters $600 million term loan due 2018

By Marisa Wong

Madison, Wis., Sept. 4 - Flextronics International Ltd. entered into a $600 million term loan agreement with Bank of Tokyo-Mitsubishi UFJ, Ltd. as administrative agent, lead arranger and bookrunner and Australia and New Zealand Banking Group Ltd. as syndication agent, according to an 8-K filed Wednesday with the Securities and Exchange Commission.

On Friday, the closing date, the company borrowed the full amount under the new term loan facility to repay the remaining outstanding loans under its 2007 term loan facility set to mature in October 2014 and under its Asia term loans scheduled to mature in September 2013 and February 2014.

Within 180 days of the closing date, the company is required to use the remainder of the borrowed funds to repay additional existing debt, the filing noted.

The new term loan matures on Aug. 30, 2018.

The company may request an increase in the term loan or request a new tranche or tranches of term loans in an aggregate amount of up to $150 million.

Borrowings bear interest at Libor plus an applicable margin between 100 basis points and 200 bps, based on the company's credit ratings.

The term loan agreement requires that the company maintain a maximum ratio of total debt to EBITDA and a minimum interest coverage ratio.

Flextronics is a Singapore-based electronics manufacturing services provider.

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