United States could also impact the cost or availability of financing under its accounts receivable securitization program. 

## The Company may not have adequate or cost-effective liquidity or capital resources which could adversely affect the Company’s operations. 

The Company’s ability to satisfy its cash needs and implement its capital allocation strategy depends on its ability to generate cash from operations and to access the financial markets, both of which are subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond the Company’s control. The Company may need to satisfy its cash needs through external financing. However, external financing is affected by various factors, including general market conditions as well as the Company’s debt ratings and operating results, and may not be available on acceptable terms or at all. An increase in the Company’s level of debt or deterioration of its operating results may cause a reduction in its current debt ratings, which could negatively impact the Company’s ability to obtain additional financing or renew existing financing and could result in a reduction of its credit limits, increased financing expenses and subject the Company to additional restrictions and covenants. A reduction in its current debt rating may also negatively impact the Company’s working capital and impair its relationship with its customers and suppliers. 

As of June 27, 2020, Avnet had debt outstanding under various notes, secured borrowings and committed and uncommitted lines of credit with financial institutions. The Company needs cash to make interest payments on, and to repay, this indebtedness and for general corporate purposes, such as funding its ongoing working capital and capital expenditure needs. Under certain of its credit facilities, the applicable interest rate and costs are based in part on the Company’s current debt rating. If its debt rating is reduced, higher interest rates and increased costs would result. In addition, certain of its debt utilizes the LIBOR rate, which the U.K.’s Financial Conduct Authority has announced that it intends to phase out by the end of 2021. At this time, it is uncertain how markets will respond to the discontinuation of LIBOR or to the proposed alternative rates, and may result in increased costs and higher interest rates. Any material increase in the Company’s financing costs or loss of access to cost-effective financing could have an adverse effect on its profitability, results of operations and cash flows. 

Under certain of its credit facilities, the Company is required to maintain certain specified financial ratios and pass certain financial tests. If the Company increases its level of debt or experiences a deterioration of its operating results, it may fail to meet these financial ratios and/or pass these tests, which may result in an event of default, whereby lenders may accelerate payment and the Company may be unable to continue to utilize these facilities. If the Company is unable to utilize these facilities or is required to repay debt earlier than management expected, it may not have sufficient cash available to make interest payments, to repay indebtedness or for general corporate needs. 

General economic or business conditions, domestic and foreign, may be less favorable than management expects and could adversely impact the Company’s sales or its ability to collect receivables from its customers, which may impact access to the Company’s accounts receivable securitization program. 

## The agreements governing some of the Company’s financings contain various covenants and restrictions that limit management’s discretion in operating the business and could prevent management from engaging in some activities that may be beneficial to the Company’s business. 

The agreements governing the Company’s financing, including its credit facility, accounts receivable securitization program and the indentures governing the Company’s outstanding notes, contain various covenants and restrictions that, in certain circumstances, limit the Company’s ability, and the ability of certain subsidiaries, to: 

● grant liens on assets; 

● make restricted payments (including, under certain circumstances, paying dividends on common stock or redeeming or repurchasing common stock); 

