Flex gets five-year $2 billion revolver with sustainability targets

By Taylor Fox

New York, Jan. 13 – Flex Ltd. entered into a new $2 billion credit agreement maturing Jan. 7, 2026, according to an 8-K filing with the Securities and Exchange Commission.

The new facility consists of a $2 billion revolving credit facility with a sublimit of $360 million for swing line loans and a sublimit of $175 million for the issuance of letters of credit.

The facility permits the company, subject to obtaining commitments from existing or additional lenders, to add one or more incremental term loans and/or increase the revolving commitments in a total amount up to $500 million.

Borrowings under the new credit facility bear interest Libor plus an applicable margin ranging from 125 basis points to 187.5 bps per annum, based on the company’s credit ratings. The revolver has a fee on unused commitments ranging from 15 bps to 30 bps per annum, depending on ratings.

The interest rate margins and commitment fee are subject to upward or downward adjustments if the company achieves, or fails to achieve, some sustainability targets regarding workplace safety and greenhouse gas emissions. These adjustments may be up to 5 bps a year in the case of the interest rate margins and 1% bp a year in the case of the commitment fee.

Bank of America, NA is the administrative agent and is joined as a bookrunner and lead arranger by BofA Securities Inc., Citibank, NA, Banco Santander, SA, New York Branch, Bank of China, New York Branch, Barclays Bank plc, BNP Paribas Securities Corp., HSBC Securities (USA), Inc., Mizuho Bank, Ltd., MUFG Bank, Ltd., Sumitomo Mitsui Banking Corp., Bank of Nova Scotia, Truist Securities, Inc., U.S Bank NA and UniCredit Bank AG, New York Branch.

Citibank is the syndication agent.

Santander, Bank of China, Barclays, HSBC, JPMorgan, Mizuho, MUFG, Sumitomo Mitsui, Bank of Nova Scotia, Truist, U.S. Bank and UniCredit Bank are the co-documentation agents.

BNP Paribas and UniCredit Bank are the sustainability coordinators.

The new credit facility replaced the company’s existing $2,252,500,000 credit agreement, dated June 30, 2017, which was otherwise due to mature on June 30, 2022.

Flex is a Singapore-based consumer and industrial products manufacturer with U.S. headquarters in San Jose, Calif.

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