Flex Ltd. entered into a $3.3 billion senior term loan credit facility on September 29, 2026, to help finance its acquisition of EPC Power Corp. The deal was disclosed in a Form 8-K filed with the U.S. Securities and Exchange Commission, marking a shift from the temporary bridge financing previously arranged for the transaction.
The Credit Agreement, dated September 29, 2026, identifies Flex Ltd. as the borrower and Citibank, N.A. as the administrative agent. The facility provides an aggregate committed amount of $3.3 billion, though no funds were drawn on the closing date. Flex may borrow the full amount in a single advance during the availability period specified in the agreement. The loan matures 364 days after it is funded.
Interest on the loans is calculated at a floating rate, which Flex can choose to be either Term SOFR plus an applicable margin or the Base Rate plus an applicable margin. The specific margin is determined by the company's senior unsecured long-term debt ratings. The agreement includes customary covenants that restrict Flex and its subsidiaries from incurring additional debt, granting liens, disposing of material assets, merging with other companies, or making significant changes to their business nature or accounting practices, subject to defined exceptions.
To maintain access to the credit, Flex must adhere to specific financial ratios as of the last day of each fiscal quarter. The company must keep its Debt/EBITDA Ratio at or below 4.50 to 1.00 and its Interest Coverage Ratio at or above 3.00 to 1.00. Failure to meet these requirements or other events of default could allow lenders to terminate commitments and accelerate outstanding borrowings.
The proceeds from this new facility, combined with cash on hand and potential proceeds from other debt or equity issuances, are intended to cover a portion of the cash consideration for the EPC Power Corp. acquisition. This acquisition was previously disclosed in a Form 8-K filed by Flex on September 4, 2026. The new term loan effectively replaces part of the company's earlier financing structure; specifically, it permanently reduced by $3.3 billion the commitments under an existing $4.4 billion senior unsecured 364-day bridge facility. That bridge facility was established via a commitment letter dated September 3, 2026, involving Citigroup Global Markets Inc., Bank of America, N.A., and BofA Securities, Inc.
While the obligations under the new Credit Agreement are not currently guaranteed by any Flex subsidiary, the company retains the option to have any subsidiary become a guarantor at any time after the closing date, provided it gives prior written notice to Citibank. A copy of the full Credit Agreement was filed as Exhibit 10.01 to the report.
In its cautionary statement regarding forward-looking statements, Flex noted that its disclosures include plans for a spin-off of its cloud and power infrastructure business into an independent, publicly traded company. The company expects this spin-off to qualify for tax-free treatment for U.S. federal income tax purposes and to provide enhanced strategic focus and financial flexibility. However, the filing warns that uncertainties remain regarding whether the spin-off will be completed, its timing, and whether it will ultimately meet tax expectations.