Freescale sets Monday launch for $4.25 billion credit facility

By Sara Rosenberg

New York, Nov. 2 - Freescale Semiconductor Inc. has scheduled a bank meeting for Monday to launch its proposed $4.25 billion senior secured credit facility, according to a market source.

Citigroup, Credit Suisse, JPMorgan, Lehman Brothers and UBS are joint bookrunners on the credit facility, and Citigroup and Credit Suisse are joint lead arrangers. Citigroup is administrative agent, Credit Suisse is syndication agent and JPMorgan is documentation agent.

The credit facility consists of a $3.5 billion seven-year term loan and a $750 million six-year revolver, according to various filings with the Securities and Exchange Commission.

There is a $1 billion accordion feature under the credit facility.

Amortization on the term loan is expected to be equal quarterly installments in an aggregate annual amount equal to 1%, with the balance payable on the final maturity.

Proceeds from the credit facility will be used to help fund the leveraged buyout of Freescale by a private equity consortium, which is led by The Blackstone Group and includes The Carlyle Group, Permira Funds and Texas Pacific Group, for $40.00 per share in cash. The total equity value of the transaction is $17.6 billion.

Other LBO financing will come from $6.15 billion of high-yield bonds that are expected to come in the form of senior unsecured notes and/or senior subordinated unsecured notes and $7.15 billion of equity, the SEC filings said.

Of the total equity amount, Blackstone will contribute $4.15 billion, Carlyle will contribute $1 billion, Permira will contribute $1 billion and Texas Pacific Group will contribute $1 billion.

Freescale is an Austin, Texas, designer and manufacturer of embedded semiconductors for the automotive, consumer, industrial, networking and wireless markets.

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