Fitch rates Jabil notes BBB-

Fitch Ratings said it assigned a BBB- rating to Jabil Circuit, Inc.'s (BBB-) proposed issuance of $500 million of 10-year senior notes.

Proceeds will be used for general corporate purposes as well as to reduce amounts outstanding under the company's revolving credit facility.

The incremental debt resulting from this issuance is already incorporated into the rating given the company's current low leverage relative to its rating, Fitch said.

Leverage of total debt to total EBITDA is estimated at 1.3x, or 2.2x when adjusted for off-balance sheet accounts receivable borrowings and operating leases, and expects leverage to remain at or below 2x pro forma for the debt offering.

Strengths include the strong management team with a track record of delivering best-in-class execution with a disciplined approach to growing the business, advantages in scale and favorable industry trends, the agency said.

Concerns include the potential for Jabil to pursue further vertical integration capabilities, an intensely competitive environment and significant customer concentration risk, the agency noted.

© 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.