Freescale Semiconductor lenders OK credit facility amendment, extension of $1.9 billion term loans

By Angela McDaniels

Tacoma, Wash., Feb. 12 - Freescale Semiconductor, Inc. received lender consent to amend its senior secured credit facilities on Friday, according to an 8-K filing with the Securities and Exchange Commission.

Consent was received from lenders representing more than 88% of the debt outstanding under the facility.

In addition, lenders have agreed to extend the maturity of at least $1.9 billion principal amount of their term loans after the proceeds from Freescale's $750 million issue of senior secured notes are used to repay amounts outstanding under the credit facility.

As previously reported, the company wants to amend the facility to extend the maturity of some of its term loans to Dec. 1, 2016 from Dec. 1, 2013 and increase the interest rate on the extended term loans to Libor plus 425 basis points from Libor plus 175 bps.

Freescale is also seeking to issue $750 million of notes and issue additional senior secured notes in the future, the proceeds of which would be used to prepay amounts outstanding under the credit facility at par.

The company expects the amendment and the note issuance to close on Feb. 19.

Some credit facility lenders filed a complaint challenging the issuance of incremental term loans on March 25, 2009, and those same lenders asked the court on Feb. 5 to stop the current amendment and extension of the credit facility and the note sale.

On Thursday, Freescale said it has been permitted by the appellate court to move forward with the amendment, extension and notes offering.

However, the plaintiffs have informed Freescale that they intend to seek to enjoin the proposed transactions in the trial court at a hearing to be held on Tuesday.

In addition, the appellate court vacated the stay of the trial court proceedings challenging the March 2009 issuance of incremental term loans.

JPMorgan is the left lead bank on the amendment.

Lenders are being offered an amendment fee of 25 bps.

Freescale is an Austin, Texas-based designer and manufacturer of embedded semiconductors for the automotive, consumer, industrial and networking markets and a subsidiary of Freescale Semiconductor Holdings I, Ltd.

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