Research Update: Jabil Inc. 'BBB-' Issuer Credit Rating Affirmed; Outlook Stable; 'A-3' Short-Term And Commercial Paper Ratings Assigned

On Aug. 15, 2019, St. Petersburg, Fla.-based outsourced technology manufacturer Jabil Inc. entered into a $1.8 billion commercial paper program. We are affirming our 'BBB-' issuer credit rating on the company. We are also assigning an 'A-3' short-term issuer credit rating to the company and the same rating to its commercial paper program. The stable outlook reflects our view that while leverage is currently at our 3x downside threshold, the company will reduce leverage to the mid-2x area by the end of fiscal 2020 (ending in August) as EBITDA grows due to recent business wins, and as it reduces borrowings incurred to support the Johnson&Johnson (J&J) acquisition and other large customer wins, and reduces receivables program utilization, which

...- On Aug. 15, 2019, St. Petersburg, Fla.-based outsourced technology manufacturer Jabil Inc. entered into a $1.8 billion commercial paper program. - We are affirming our '###-' issuer credit rating on the company. - We are also assigning an 'A-3' short-term issuer credit rating to the company and the same rating to its commercial paper program. - The stable outlook reflects our view that while leverage is currently at our 3x downside threshold, the company will reduce leverage to the mid-2x area by the end of fiscal 2020 (ending in August) as EBITDA grows due to recent business wins, and as it reduces borrowings incurred to support the Johnson & Johnson (J&J) acquisition and other large customer wins, and reduces receivables program utilization, which increased to support working capital increases resulting from its double-digit revenue growth in 2018 and 2019....

Research Update