Moody's rate Sanmina notes Ba3

Moody's Investors Service said it assigned a Ba3 rating (LGD4, 53%) to Sanmina-SCI Corp.'s $600 million senior floating-rate notes due 2010 and 2014.

The agency also affirmed the company's Ba3 corporate family rating and SGL-2 speculative grade liquidity rating and the B2 (LGD5, 83%) ratings on Sanmina's $400 million and $600 million senior subordinated notes, due 2013 and 2016, respectively.

The outlook is stable.

The proceeds will be used to refinance the company's $600 million unsecured term facility due 2008.

Moody's said the Ba3 rating on the new notes reflects both the overall probability of default, which has been assigned a Ba3, and a loss given default of LGD4 for the new notes. The notes will be guaranteed on a senior unsecured basis by Sanmina's domestic restricted subsidiaries.

The company's Ba3 corporate family rating reflects the industry's overcapacity, volatility and competition and the company's weak financial performance and credit metrics, Moody's said.

The ratings also consider the company's recent performance stabilization, inventory management and improved cash flow and the agency's expectation that the company will further improve its business and financial profile after its potential exit from the low-margin PC business.

The agency also noted the improved debt-maturity profile of Sanmina via this financing, which replaces the facility due January 2008 with the earliest maturity on the notes in 2010.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.