Arrow Electronics To Buy Back Debt, Issue Notes

MELVILLE, N.Y. (AP) — Arrow Electronics Inc., which makes electronics parts, Wednesday offered to buy back $200 million in notes due in October 2010 and fund the purchase by selling $250 million in notes due 2020.

Arrow is offering cash, between now and Tuesday, for the principal and interest due on the 9.15 percent senior notes that expire next year.

J.P. Morgan Securities Inc. is the lead dealer manager for the tender offer and HSBC Securities (USA) Inc. is the co-dealer manager.

The buyback depends on Arrow selling $250 million in senior notes due 2020.

Moody's Investors Service rated the securities due 2020 at "Baa3," an investment-grade designation, with a "Stable" outlook.

The ratings agency said that "as one of the leading global value-added distributors of electronic components and information technology products, Arrow's significant scale and flexible operating model facilitate solid free cash flow generation in both up and down cycles, which has led to its strong internal liquidity position."

Deutsche Bank's Sherri Scribner said the move was "neutral," and noted that Arrow already has enough cash on hand to cover the October 2010 maturity.

In morning trading, shares rose 35 cents to $29.74.