onsemi Announces Proposed Private Offering of $1.1 Billion of Convertible Senior Notes

About this update from On Semiconductor Corporation

[{"type":"text","content":" PHOENIX--(BUSINESS WIRE)--\nON Semiconductor Corporation (Nasdaq: ON) (“onsemi”) announced today that it intends to offer, subject to market and other conditions, $1.1 billion aggregate principal amount of Convertible Senior Notes due 2029 (the “notes”) in a private offering. The notes will be offered only to persons reasonably believed to be qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). onsemi also expects to grant to the initial purchasers of the notes an option to purchase, within a 13-day period beginning on, and including, the date on which the notes are first issued, up to an additional $165 million aggregate principal amount of the notes.\n\nonsemi intends to use the net proceeds from the offering, together with cash on hand, (i) to repay up to $1,086.0 million of the existing outstanding indebtedness under onsemi’s Term Loan “B” Facility, which accrues interest at a floating rate tied to the Secured Overnight Financing Rate (“SOFR”), which interest rate was equal to 6.42% as of December 31, 2022, and related transaction fees and expenses, if any, (ii) to pay the cost of the convertible note hedge transactions described below (after such cost is partially offset by the proceeds to it from the sale of the warrant transactions described below), and (iii) with respect to the remainder of the net proceeds, if any, for general corporate purposes. If the initial purchasers exercise their option to purchase additional notes, onsemi expects to enter into additional convertible note hedge transactions and warrant transactions, and intends to use cash on hand, a portion of the net proceeds from the sale of any such additional notes or a combination thereof, to pay the costs of such additional convertible note hedge transactions (which would be partially offset by the proceeds to onsemi from the sale of additional warrant transactions).\n\nThe notes will be onsemi’s senior unsecured obligations and will be guaranteed by certain of its subsidiaries. The notes are expected to pay interest semiannually in arrears and to mature on March 1, 2029, unless earlier repurchased, redeemed or converted. onsemi will satisfy any conversion elections by paying cash up to the aggregate principal amount of the notes to be converted, and paying or delivering, as the c...

More updates from On Semiconductor Corporation