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Moody's rates Avnet converts Ba2
Moody's Investors Service said it affirmed Avnet's senior unsecured debt rating at Ba2 and assigned a Ba2 rating to the proposed offering of $270 million senior convertible debentures, proceeds of which will be used to repurchase any or all of its 7.875% $360 million senior notes due February 2005 through an open market tender offer.
The outlook is revised to stable from negative.
Moody's said the rating affirmation and stable outlook reflect substantial elimination of refinancing risk of the senior notes due February 2005, historically high cash balance of $479 million as of Jan. 3, moderate improvement in operating results and interest coverage from prior low levels and high debt leverage amidst very low overall returns and profitability.
For the 12 month period ended Jan. 3, Avnet attained adjusted EBITDA to interest coverage of 2.3 times, while lowering its debt to adjusted EBITDA leverage ratio to 5.7 times.
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