FLEX LTD. (NASDAQ:FLEX) Files An 8-K Entry into a Material Definitive Agreement

ME Staff 8-k
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FLEX LTD. (NASDAQ:FLEX) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.

On June30, 2017 (the Closing Date), Flex Ltd. (the Company), as borrower, entered into a new $2.2525 billionCredit Agreement (the New Credit Facility) with Bank of America, N.A., as Administrative Agent and Swing Line Lender, and the several banks and other financial institutions or entities from time to time parties thereto as lenders (the Lenders). The New Credit Facility, which matures on June30, 2022, consists of (i)a $1.75 billion revolving credit facility with a sublimit of $300 million available for swing line loans and a sublimit of $150 million available for the issuance of letters of credit and (ii)a $502.5 million term loan facility. The New Credit Facility permits the Company, subject to obtaining commitments from existing or additional lenders and subject to certain other conditions, to add one or more incremental term loan facilities and/or increase the revolving commitments in an aggregate amount not to exceed $500 million.

On the Closing Date, the Company borrowed $502.5 million under the term loan facility of the New Credit Facility to repay approximately $502.5 million of outstanding term loans and other amounts owing under the Companys existing $2.0 billion Credit Agreement, dated as of March31, 2014, among the Company and certain of its subsidiaries, as borrowers, Bank of America, N.A., as Administrative Agent and Swing Line Lender, and the other Lenders party thereto (as amended, the Existing Credit Facility), which term loans were otherwise due to mature on March31, 2019. The New Credit Facility replaced the Companys Existing Credit Facility, which was terminated on the Closing Date.

Borrowings under the New Credit Facility bear interest, at the Companys option, either at (i)the Base Rate, which is defined as the greatest of (a)the Administrative Agents prime rate, (b)the federal funds effective rate, plus 0.50% and (c)the LIBOR (the London Interbank Offered Rate) rate that would be calculated as of each day in respect of a proposed LIBOR loan with a one-month interest period, plus 1.0%; plus, in the case of each of clauses (a)through (c), an applicable margin ranging from 0.125% to 0.875% per annum, based on the Companys credit ratings (as determined by Standard Poors Financial Services LLC, Moodys Investors Service,Inc. and Fitch Ratings Inc.) or (ii)LIBOR plus the applicable margin for LIBOR loans ranging between 1.125% and 1.875% per annum, based on the Companys credit ratings. The Company is required to pay a quarterly commitment fee on the unutilized portion of the revolving credit commitments under the New Credit Facility ranging from 0.15% to 0.30% per annum, based on the Companys credit ratings. The Company is also required to pay letter of credit usage fees ranging from 1.125% to 1.875% per annum (based on the Companys credit ratings) on the amount of the daily average outstanding letters of credit and a fronting fee of 0.125% per annum on the undrawn and unexpired amount of each letter of credit.

The New Credit Facility is unsecured, and contains customary restrictions on the ability of the Company and its subsidiaries to (i)incur certain debt, (ii)make certain investments, (iii)make certain acquisitions of other entities, (iv)incur liens, (v)dispose of assets, (vi)make non-cash distributions to shareholders, and (vii)engage in transactions with affiliates. These covenants are subject to a number of significant exceptions and limitations. The New Credit Facility also requires that the Company maintain a maximum ratio of total indebtedness to EBITDA (earnings before interest expense, taxes, depreciation and amortization), and a minimum interest coverage ratio during the term of the New Credit Facility.


The New Credit Facility contains customary events of default. If an event of default under the New Credit Facility occurs and is continuing, then the Administrative Agent shall, at the request of, or may, with the consent of, the required lenders, declare any outstanding obligations under the New Credit Facility to be immediately due and payable. In addition, if an actual or deemed entry of an order for relief with respect to the Company is made under the United States bankruptcy code or comparable foreign law, then any outstanding obligations under the New Credit Facility will automatically become immediately due and payable.

The obligations under the New Credit Facility are not guaranteed by any subsidiary of the Company. Prior to the termination of the Existing Credit Facility, certain subsidiaries of the Company (the Subsidiary Guarantors) guaranteed the Companys obligations under (i)the Existing Credit Facility, (ii)the Companys 4.625% notes due 2020 and the Companys 5.000% notes due 2023 issued to the Indenture, dated as of February20, 2013, among the Company, the subsidiary guarantors party thereto and U.S. Bank National Association, as trustee (as amended by the First Supplemental Indenture, dated as of March28, 2013, the Second Supplemental Indenture, dated as of August25, 2014 and the Third Supplemental Indenture, dated as of September11, 2015, the 2013 Indenture), (iii)the Companys 4.750% Notes due 2025 issued to the Indenture, dated as of June8, 2015, among the Company, the subsidiary guarantors party thereto and U.S. Bank National Association, as trustee (as amended by the First Supplemental Indenture, dated as of September11, 2015, the 2015 Indenture) and (iv)the Term Loan Agreement, dated as of November30, 2016, among the Company, the lenders from time to time party thereto and The Bank of Tokyo-Mitsubishi UFJ,Ltd., as administrative agent (the Term Loan Agreement). Upon the termination of the Existing Credit Facility on the Closing Date, such Subsidiary Guarantors were released from their guarantees under each of the 2013 Indenture, the 2015 Indenture and the Term Loan Agreement.

The foregoing description of the New Credit Facility is qualified in its entirety by reference to the complete text of the New Credit Facility, a copy of which is filed as Exhibit10.01 to this Current Report on Form8-K and incorporated herein by reference.

Some of the lenders under the New Credit Facility and the Existing Credit Facility and/or their respective affiliates have from time to time performed and may in the future perform various commercial banking, investment banking and other financial advisory services for the Company and/or its subsidiaries in the ordinary course of business, for which they received or will receive customary fees and commissions.

Item 1.02 Termination of a Material Definitive Agreement.

The information set forth in Item 1.01 above with respect to the Existing Credit Facility is hereby incorporated by reference into this Item 1.02.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth in Item 1.01 above is hereby incorporated by reference into this Item 2.03.


Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(b)On June29, 2017, H. Raymond Bingham, Chairman of the Board of Directors of the Company tendered his resignation from the Companys Board of Directors, effective immediately. Mr.Binghams resignation is not the result of any disagreement with the policies, practices or procedures of the Company.

Also on June29, 2017, the Board of Directors of the Company elected Michael D. Capellas, an independent director, as Chairman of the Board.

Item 8.01Other Events.

On the Closing Date, in accordance with the terms of the 2013 Indenture, the 2015 Indenture, and the Term Loan Agreement, each of the Subsidiary Guarantors was released from its guarantees under such agreements.

Item 9.01 Financial Statements and Exhibits.

(d)Exhibits

Exhibit

10.01

Credit Agreement, dated as of June30, 2017, among Flex Ltd. and certain of its subsidiaries from time to time party thereto, as borrowers, Bank of America, N.A., as Administrative Agent and Swing Line Lender, and the other Lenders party thereto




FLEX LTD. Exhibit
EX-10.01 2 a17-15867_2ex10d01.htm EX-10.01 Exhibit 10.01   Published CUSIP Numbers: Deal: Y3003AAA9 Revolver: Y3003AAB7 Term: Y3003AAC5   CREDIT AGREEMENT   Dated as of June 30,…
To view the full exhibit click here
About FLEX LTD. (NASDAQ:FLEX)

Flex Ltd, formerly Flextronics International Ltd. provides design, engineering, manufacturing, and supply chain services and solutions. The Company designs, builds, ships and services packaged consumer electronics and industrial products for original equipment manufacturers (OEMs). Its segments include High Reliability Solutions (HRS), Consumer Technologies Group (CTG), Industrial and Emerging Industries (IEI) and Communications & Enterprise Compute (CEC). The HRS segment consists of its medical business, automotive business, and defense and aerospace businesses. The CTG segment includes its mobile devices business, consumer electronics business and high-volume computing business. The IEI segment consists of semiconductor and capital equipment, office solutions, household industrial and lifestyle, industrial automation and kiosks, energy and metering, and lighting. The CEC segment includes radio access base stations, remote radio heads, and small cells for wireless infrastructure.