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ON Semiconductor amends 0% convertibles to urge holders to delay put
By Jennifer Chiou
New York, April 12 - ON Semiconductor Corp. announced an amendment to its zero-coupon convertible senior subordinated series B notes due 2024, adding a put option on April 15, 2012 for those who do not require the company to purchase their securities this year on April 15.
As of now, holders may put back all or a portion of the notes at a price equal to 100% of the total principal amount of the notes prior to 5 p.m. ET on April 13.
The 2012 put option is meant to benefit those who forgo the upcoming put option. In addition to the future put option, the company said it added additional call protection, eliminating its ability to redeem the notes at its option until April 15, 2012.
Prior to the amendment, ON Semiconductor said it would have been able to redeem the notes at its option at any time from April 15 onwards.
"As of the end of the fourth quarter of 2009, we had approximately $571 million of cash, cash equivalents and short-term investments on our balance sheet," Donald Colvin, ON Semiconductor executive vice president and chief financial officer, said in a news release.
"The amendments to the notes provide a mechanism for ON Semiconductor to extend zero-coupon debt based upon feedback from certain bondholders and provide additional financial flexibility to use excess cash to retire other higher coupon debt instruments."
A company spokesperson previously said that ON Semiconductor would use cash to purchase the notes. The total purchase price will be approximately $99.4 million if all the outstanding notes are surrendered for purchase under the put option.
ON Semiconductor is a Phoenix-based designer, manufacturer and marketer of power and data management semiconductors and standard semiconductor components.
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