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Deutsche Bank Securities, Others Arrange $2.8B Debt Facilities for ON Semiconductor

March 18, 2016, 07:50 AM
Filed Under: Technology

ON Semiconductor Corporation announced that it has finalized pricing and allocations of new secured debt facilities. The secured debt facilities consist of $2.2 billion of first lien term loans and a $600 million revolving credit facility. Deutsche Bank Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, BMO Capital Markets Corp., HSBC Securities (USA) Inc., and Sumitomo Mitsui Banking Corporation are acting as Joint Lead Arrangers and Joint Bookrunners. Barclays Bank PLC, Compass Bank, The Bank of Tokyo-Mitsubishi UFJ, Ltd., Morgan Stanley Bank, N.A., Bank of Arizona and KBC Bank N.V. are co-managers for the offering.

At acquisition closing, ON Semiconductor expects to draw $200 million from the revolving credit facility. ON Semiconductor intends to use the proceeds of the secured debt facilities, together with cash-on-hand, to (i) pay the cash consideration in connection with the acquisition of Fairchild Semiconductor International, Inc. (“Fairchild”), (ii) effect the repayment of any amounts under Fairchild’s outstanding credit facility, as well as certain existing indebtedness of ON Semiconductor, and (iii) pay fees and expenses related to the transaction. Additionally the revolving credit facility will be used for general corporate purposes.

During the marketing period of the secured debt facilities, the first lien term loan and revolving credit facility both were upsized due to strong investor demand. The first lien term loan is due in 2023 and includes a 101 soft-call provision for 12 months. The first lien term loan will bear interest at a rate of LIBOR plus 4.50% per annum, subject to a floor of 0.75% per annum and with an issuance price of 98.50%.

At acquisition close, ON Semiconductor will have pro forma net leverage of 3.2x including synergies and intends to decrease net leverage to under 2.0x within two years after closing the Fairchild acquisition.

ON Semiconductor is driving energy efficient innovations, empowering customers to reduce global energy use. The company is a leading supplier of semiconductor-based solutions, offering a comprehensive portfolio of energy efficient sensors, power management, analog, logic, timing, connectivity, discrete, SoC and custom devices.

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