By Stephanie N. Rotondo
Seattle, June 22 – STMicroelectronics NV priced a two-tranche $1.5 billion offering of five- and seven-year senior convertible bonds on Thursday.
The $750 million of 0% five-year paper was issued at 101.265 for a gross yield to maturity of negative 0.25%. Pricing came in the middle of the 100 and 102.53 issuance talk and the negative 0.5% to 0% yield talk.
The $750 million of seven-year bonds pay a coupon of 0.25% and priced at par. Like the five-year issue, this tranche came in the middle of the 0% to 0.5% price talk.
Both parts have an initial conversion premium of 37.5%, equal to an initial conversion price of $20.54 a share. Initial premium talk was 35% to 40%.
The conversion price was based on the volume-weighted average of the company’s stock on the Italian Stock Exchange, then converted into dollars.
Morgan Stanley & Co. LLC and Société Générale CIB are the joint global coordinators and joint bookrunners. Citigroup Global Markets Inc., J.P. Morgan Securities LLC and UniCredit are also acting as joint bookrunners.
The convertibles sale is being done in connection with the early redemption of the company’s $600 million 0% convertible notes due 2019, as well as the launch of a $297 million share buy-back program aimed at meeting obligations arising from debt instruments that are exchangeable into equity and to meet share award program obligations.
Proceeds from the new convertibles will be used for general corporate purposes, including the early redemption of the 2019 notes and the future redemption of the $400 million outstanding 1% convertible notes due 2021.
Conversions will be settled in cash, ordinary stock or a combination of the two, at the company’s option.
The five-year convertibles are contingently convertible for three years and 21 days from settlement if the stock hits a 130% price hurdle. After that, the paper can be converted at any time.
The seven-year paper also has a 130% contingent call feature, running for four year and 21 days from settlement.
STMicroelectronics is a Geneva, Switzerland-based semiconductor manufacturing company.
| Issuer: | STMicroelectronics NV
|
| Securities: | Senior convertible bonds
|
| Bookrunners: | Morgan Stanley & Co. LLC, Société Générale CIB, Citigroup Global Markets Inc., J.P. Morgan Securities LLC and UniCredit
|
| Pricing date: | June 22
|
| Settlement: | July 3
|
| Stock symbol: | Milan: STM
|
| Stock price: | €13.45 as of June 22 close
|
| Market capitalization: | €11.61 billion
|
|
|
| Five-year convertibles
|
| Amount: | $750 million
|
| Maturity: | July 3, 2022
|
| Coupon: | 0%
|
| Price: | 101.265 versus par of $200,000
|
| Yield: | -0.25%
|
| Initial conversion price: | $20.64
|
| Initial conversion premium: | 37.5%
|
| Contingent conversion: | For three years and 21 days after settlement, assuming stock breaks a 130% price hurdle
|
| Put options: | Upon a delisting or change of control
|
| Talk: | -0.5% to 0%, up 35% to 40%
|
|
|
| Seven-year convertibles
|
| Amount: | $750 million
|
| Maturity: | July 3, 2024
|
| Coupon: | 0.25%
|
| Price: | Par of $200,000
|
| Yield: | 0.25%
|
| Initial conversion price: | $20.64
|
| Initial conversion premium: | 37.5%
|
| Contingent conversion: | For four years and 21 days after settlement, assuming stock breaks a 130% price hurdle
|
| Put options: | Upon a delisting or change of control
|
| Talk: | 0% to 0.5%, up 35% to 40%
|
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