Fitch affirms Avnet

Fitch Ratings said it affirmed Avnet Inc.'s BB senior unsecured debt, including Avnet's $87 million 7 7/8% senior notes due February 2005, $400 million 8% senior notes due November 2006, $475 million 9¾% senior notes due February 2008, and $300 million 2% convertible senior debentures due March 2034 but putable in March 2009.

The outlook is stable.

Fitch said the rating considers Avnet's high degree of exposure to the global semiconductor market, which historically has been characterized by cyclical demand and volatile cash flows, and the ongoing challenges the information technology distributors face in meaningfully expanding their thin operating margins.

The rating also considers the significant investment levels, which may include debt-financed acquisitions, required for the company to expand its small albeit profitable foothold in higher growth Asia-Pacific markets.

Rating strengths center on Avnet's leading industry position, which is primarily focused on a diversified small- to medium-sized customer base, broad scope and extensive geographic reach, the agency said.

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