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Prospect News home > News index > List of issuers A > Headlines for Avnet, Inc. > News item |
Fitch rates Avnet converts BB
Fitch Ratings said it has assigned a BB rating to Avnet Inc.'s proposed offering of $270 million of 30-year senior convertible debentures.
The outlook is stable.
Proceeds from the offering are expected to be used to repurchase a portion of the company's $360 million 7.875% notes maturing Feb. 15, 2005 as the company has announced a cash tender offer for the notes.
Fitch said it views the announced transaction positively as the company will be using lower interest bearing debt to replace existing, higher cost debt, as well as improving its debt maturity schedule, as the debentures are not putable until 2009.
Overall, Fitch said the rating continues to reflect concerns regarding Avnet's strained credit protection measures, high debt levels, lower but improved capacity utilization levels along with the pricing pressures, demand variability and lower growth characteristics of the technology distribution industry.
Positively, Fitch recognizes the adequate liquidity and leading industry position. Profitability expansion is possible from on-going cost cutting initiatives and the anticipated growth for semiconductors.
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