Flex enters into $3.3 billion credit facility tied to EPC Power acquisition

Flex Ltd. (FLEX) entered into a Credit Agreement providing a senior term loan credit facility in an aggregate committed amount of $3.3 billion, a regulatory filing showed Monday.

The credit facility was not drawn on the closing date of September 29, 2026. Subject to the satisfaction of conditions in the agreement, the company may borrow under the facility in a single advance during the availability period. The facility will mature 364 days after the date on which it is funded.

Loans under the credit agreement bear interest at a floating rate, at the company's option, of either Term SOFR plus an applicable margin or the Base Rate plus an applicable margin. Those margins are determined based on the company's senior unsecured long-term debt ratings.

Proceeds of the credit facility, together with cash on hand and proceeds of other debt or equity issuances or borrowings, are intended to be used to finance a portion of the cash consideration payable for the company's acquisition of EPC Power Corp. and related assets, to pay related fees and expenses, and for other permitted purposes. The acquisition was previously disclosed in a filing on September 4, 2026.

The effectiveness of the new credit agreement automatically and permanently reduced, on a dollar-for-dollar basis, the commitments under the company's existing $4.4 billion senior unsecured 364-day bridge facility from September 3, 2026.

The credit agreement contains customary covenants, including restrictions on incurring debt, granting liens, disposing of material assets, and merging or consolidating with other companies. Flex must maintain a Debt/EBITDA ratio not exceeding 4.50 to 1.00 as of the last day of any fiscal quarter, and an interest coverage ratio of not less than 3.00 to 1.00.

Citibank, N.A. serves as the administrative agent for the facility. Citibank, BofA Securities, Banco Bilbao Vizcaya Argentaria, BNP Paribas Securities, DBS Bank, JPMorgan Chase Bank, PNC Bank, The Toronto-Dominion Bank, Truist Securities, and U.S. Bank National Association acted as joint lead arrangers and joint bookrunners.