S&P ups Sanmina, rates notes B

Standard & Poor's said it raised the corporate credit rating on Sanmina-SCI Corp. to B+ from B.

The outlook is stable.

S&P assigned Sanmina's proposed $500 million of senior notes due 2019 an issue-level rating of B with a recovery rating of 5, indicating the expectation of modest (10%-30%) recovery in the event of a payment default.

The proposed notes will be used to retire all outstanding 6¾% senior subordinated notes due 2013 and retire some 8 1/8% senior subordinated notes due 2016.

S&P revised the recovery rating on the company's existing senior debt to 5 (10% to 30% recovery expectation) from 4 (30% to 50%), reflecting the increased amount of senior debt in the capital structure.

S&P raised the issue-level rating on Sanmina's subordinated debt to B- from CCC+, in accordance with raising of the corporate credit rating. The recovery rating on this debt remains 6, indicating negligible (0%-10%) recovery.

The upgrade reflects strengthened credit measures over the past year and an expectation that Sanmina will experience relatively stable profitability and leverage, despite highly competitive and cyclical industry conditions, the agency said.

The ratings reflect the expectation that Sanmina will experience modest revenue growth in the near term and relatively stable profitability and leverage, despite highly competitive and cyclical industry conditions, the agency said.

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