Moody's may lower Sanmina

Moody's Investors Service said it placed the ratings of Sanmina-SCI Corp. on review for possible downgrade based on the company's continued poor operating results, which reflect weak demand from OEMs and operational inefficiencies in the components business.

The electronic manufacturing services sector continues to be plagued by excess capacity, competitive pricing pressures and ongoing business restructurings, Moody's said, noting that its review will focus on Sanmina's ability to grow revenue across all of its end-market verticals, stabilize its operating margins, effectively manage its working capital, rationalize its asset base and generate proceeds from divestitures, namely the low margin PC business.

The agency said that ratings under review for possible downgrade include: Ba3 corporate family rating, Ba3 rating on $300 million floating rate notes due 2010, Ba3 rating on $300 million floating-rate notes due 2014, B2 rating on $400 million senior subordinated notes due 2013, B2 rating on $600 million senior subordinated notes due 2016 and SGL-2 speculative-grade liquidity rating.

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