Flextronics units get $1.5 billion revolver, $500 million term loan

By Angela McDaniels

Tacoma, Wash., April 1 - Some of Flextronics International Ltd.'s subsidiaries entered into a $2 billion credit facility due March 31, 2019 on Monday that consists of a $1.5 billion revolving credit facility and a $500 million term loan, according to an 8-K filing with the Securities and Exchange Commission.

The revolver has a $300 million sublimit for swingline loans and a $150 million sublimit for letters of credit.

The interest rate is Libor plus a margin that ranges from 112.5 basis points to 212.5 bps based on the company's credit ratings. The revolver has a commitment fee of 15 bps to 40 bps. The company must pay letter-of-credit usage fees ranging from 112.5 bps to 212.5 bps on the amount of the daily average outstanding letters of credit and a fronting fee of 12.5 bps on the undrawn and unexpired amount of each letter of credit.

The new credit facility has a $500 million accordion feature. Any increases made can take the form of incremental term loans or an increase in revolver commitments.

Bank of America Merrill Lynch, Citigroup Global Markets, Inc., BNP Paribas Securities Corp., HSBC Securities (USA) Inc., J.P. Morgan Securities LLC, RBS Securities Inc. and Bank of Nova Scotia are the joint lead arrangers and joint bookrunners.

Bank of America, NA is the administrative agent and swingline lender. Citibank, NA is the syndication agent. Bank of America is letter of credit issuer. BNP Paribas, HSBC Bank USA, NA, JPMorgan Chase Bank, NA, Royal Bank of Scotland plc and Bank of Nova Scotia are the co-documentation agents.

At closing, the company used the term loan proceeds for working capital and to repay $438.5 million of outstanding term loans, including interest and fees owed under the company's existing $2 billion credit agreement with Bank of America as administrative agent, which was then terminated.

The new credit facility requires that the company maintain a maximum ratio of total debt to EBITDA and a minimum interest coverage ratio.

Borrowings are guaranteed by the company and some of its subsidiaries.

Flextronics is a Singapore-based electronics manufacturing services provider.

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