Fitch rates Arrows Electronics notes BBB-

Fitch Ratings said it assigned a BBB- rating to Arrows Electronics, Inc. issuance of $500 million in senior unsecured notes, $250 million of which mature November 2015, $250 million of which mature March 2012.

The company has a issuer default rating of BBB-, senior notes rating of BBB- and senior unsecured bank credit facility rating of BBB-.

The outlook is stable.

The proceeds are expected to be used to repay borrowings outstanding under the company's credit facility or its securitization facility and for general corporate purposes.

Fitch said it estimates the company's leverage at 2.2x, or 2.8x when adjusted for operating leases.

Credit strengths include the company's leading market positions in both component and enterprise computing distribution worldwide and its ability to generate cash from operations in a downturn from reduced working capital requirements, the agency said.

Credit concerns include Arrow's thin operating margins and its exposure to the cyclical demand patterns and cash flows associated with the semiconductor industry, Fitch said.

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