Fitch affirms Flextronics

Fitch Ratings said it affirmed Flextronics International Ltd.'s BB+ senior subordinated debt and assigned a BBB- rating for the company's senior unsecured bank credit facility.

The outlook is stable.

Fitch said the ratings and outlook reflect Flextronics' relatively consistent operating performance over the last several years, which has been driven by greater exposure to more stable consumer electronics end-markets; industry-leading cash conversion cycle, which has contributed to annual free cash flow; and one of the industry's best-positioned low-cost manufacturing footprints.

Ratings concerns, Fitch said, center on integration risks related to the acquisition of Nortel Networks' manufacturing facilities, Flextronics' acquisitive history and more aggressive operating strategy, and increased operating leverage associated with the company's vertical model, which has contributed meaningfully to recent operating margin expansion but increases Flextronics sensitivity to demand.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.