Moody's: Sanmina-SCI outlook stable

Moody's Investors Service said it affirmed the ratings of Sanmina-SCI Corp. and revised the outlook to stable from negative.

Moody's affirmed the Ba2 rating on Sanmina's $750 million 10.375% senior secured notes (second lien) due 2010; B1 rating on SCI Systems Inc.'s $519.5 million 3% convertible subordinated notes due 2007 (guaranteed by Sanmina-SCI Corp.); B1 rating on Sanmina's $590.3 million accreted value zero-coupon convertible subordinated debentures due 2020; Ba2 senior implied rating; Ba3 senior unsecured issuer rating; and SGL-1 speculative grade liquidity rating. Moody's withdrew the Ba1 rating on Sanmina's $275 million guaranteed senior secured term loan B due 2007 (debt refinanced).

Moody's said the improved outlook reflects the company's ability to generate top line growth, margin expansion and balance sheet deleveraging since the October 2002 downgrade. The stable outlook also incorporates the expectation that the company will benefit from some combination of more solidified recovery from key, high margin end markets (telecommunications, servers and storage), increased contribution from its operating leverage heavy PCB business and more material cost savings realization from its comprehensive restructuring program.

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