S&P rates Flex loan BBB-

S&P said it assigned a BBB- rating to Flex Ltd.'s five-year $700 million unsecured term loan.

The rating on the loan is the same as the corporate credit rating on the company and the rating on its existing unsecured debt. Those ratings are unchanged by this transaction, S&P said.

The proceeds will be used to repay the company’s $570 million term loan due August 2018 and for general corporate purposes, S&P said.

The impact of the transaction is neutral to the company’s credit metrics as most of the incremental proceeds will be used to repay debt, the agency said.

The company’s BBB- corporate credit rating reflects Flex's leading position in the contract manufacturing space and improving mix of faster-growing and more profitable end-markets, S&P said.

The ratings also consider the company's leverage in the mid-2x range as of Sept. 30, the agency said.

Those advantages are partly offset by competitive and cyclical industry conditions and customer concentration that is in line with or better than its peers, but still high for the broader rated technology space, S&P said.

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