ON Semiconductor to price $400 million 20-year convertibles, talked at 2.375%-2.875%, up 37.5%-42.5%

By Kenneth Lim

Boston, Dec. 11 - ON Semiconductor Corp. plans to price on Tuesday before the market opens $400 million of 20-year convertible senior subordinated notes, talked at a coupon of 2.375% to 2.875% and an initial conversion premium of 37.5% to 42.5%.

The notes will be offered at par.

There is an over-allotment option for a further $60 million.

Morgan Stanley and Citigroup are the bookrunners of the overnight Rule 144A offering.

The convertibles will be non-callable for the first seven years and may be put in years seven, 10 and 15.

The convertibles will have dividend and takeover protection.

ON Semiconductor, a Phoenix-based maker of power and data management semiconductors, said it will use the proceeds of the deal to repay about $199.1 million of an outstanding senior secured debt as well as to concurrently buy back up to $230 million of its common stock.

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