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Moody's rates Avnet notes Baa3
Moody's Investors Service said it assigned a Baa3 rating to Avnet, Inc.'s proposed $300 million senior unsecured 10-year notes offering.
Moody's said it believes proceeds will be used to pre-fund and partially finance Avnet's pending acquisition of Bell Microproducts Inc. for $631 million in cash.
The outlook is stable.
The rating reflects Avnet's position as one of the leading global distributors of electronic components and information technology products, substantial scale, geographic breadth and reach into the small and medium-sized business customer base, Moody's said.
It also takes into account Avnet's ability to remain profitable during the recent recession via cost reduction measures, the agency said.
Challenges include Avnet's low- to mid-single-digit operating margins, vendor concentration, limited pricing power and exposure to the cyclical IT industry, Moody's added.
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