FLEX LTD. 8-K

What Happened

• Flex Ltd. announced on April 30, 2026 that it entered into a Credit Agreement providing a senior delayed-draw term loan credit facility with an aggregate commitment of $1.45 billion, with Citibank, N.A. acting as administrative agent. The facility matures 364 days after the date the term loans are first funded.
• The company also disclosed on May 4, 2026 (via a furnished press release) that it completed the previously announced acquisition of Electrical Power Products, Inc. (EP²). Proceeds of the Credit Facility may be used for general corporate purposes, including financing the EP² acquisition.

Key Details

• Facility amount: $1.45 billion senior delayed-draw term loan.
• Closing date: April 30, 2026; maturity: 364 days after first funding under the agreement.
• Interest: floating rate — borrower’s option of Term SOFR + margin or Base Rate + margin; margin tied to Flex’s long-term unsecured debt ratings.
• Financial covenants: Debt/EBITDA ratio ≤ 4.00:1.00 and Interest Coverage ratio ≥ 3.00:1.00 (tested as of each fiscal quarter end).
• Guarantee status: Obligations are not currently guaranteed by subsidiaries, though Flex may designate subsidiaries as guarantors later with prior notice.
• Defaults/remedies: customary events of default; on default, commitments may terminate and borrowings may be accelerated.

Why It Matters

• The new $1.45B facility provides near-term liquidity to fund the EP² acquisition and other corporate needs, reducing immediate cash pressure from the transaction.
• The covenant tests (leverage and interest coverage) create measurable targets management must meet each quarter; failing those tests could restrict operations or trigger default remedies.
• Interest margins tied to Flex’s credit ratings mean borrowing costs can change with rating moves, so investors should watch leverage metrics and any future guarantor decisions or refinancings.