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S&P rates Solectron notes B-
Standard & Poor's said it assigned a B- rating to Solectron Global Finance Ltd.'s proposed $150 million subordinated notes due 2016, which will be guaranteed on a subordinated basis by Solectron Corp.
The outlook is positive.
Proceeds from the notes, together with cash on hand, will be used to repay at maturity the company's $150 million of 7 3/8% senior notes, which mature on March 1.
Solectron's B+ corporate credit, senior secured bank loan and senior unsecured debt ratings reflect operating profitability at the low end of the range of its peers in the highly competitive electronics manufacturing services industry and expectations of revenue declines, somewhat offset by adequate financial flexibility from cash balances and light leverage of 2.6x debt to EBITDA, the agency said.
The positive outlook reflects Solecton's strengthened debt protection measures, which the company brought about through permanent debt reduction without impairing liquidity, S&P said.
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