Moody's rates Sanmina notes Ba2; outlook positive

Moody's Investors Service said it assigned Ba2 (LGD3, 35%) ratings to Sanmina Corp.'s $350 million senior secured note offering, changed the outlook to positive and affirmed the company's corporate family rating at Ba3, probability of default rating at Ba3-PD and senior unsecured notes due 2019 at B1 (LGD5, 78%).

The proceeds of the new notes will be used for general corporate purposes, including a partial redemption of the company's senior unsecured notes.

The change in outlook reflects Moody's views that Sanmina's operating turnaround and healthier financial profile will enable it to improve its credit protection and profitability measures over the next 12 to 18 months.

The agency said that overall, Sanmina's Ba3 corporate family rating reflects the significant reduction in debt and financial leverage over the last several years, and the company's business prospects have improved through greater diversification away from its historic dependence on communications and computing customers, with major contract wins in the defense, industrial and health-care sectors, including a successful entry into the oil and gas sector.

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