ON Semiconductor tenders for 12% 2008 and 2010 notes

New York, Dec. 1 - ON Semiconductor Corp. said it has begun a cash tender offer for any and all of its $195 million of outstanding 12% senior secured notes due 2008 and any and all of its outstanding $130 million 12% senior secured notes due 2010 issued by ON Semiconductor and Semiconductor Components Industries LLC. The company is also seeking noteholder consents to proposed changes in the notes' respective indentures and the related security documents.

ON said it would set the prices to be paid for each series of notes at 2 p.m. ET on Dec. 14. It set consent deadlines for each series of notes at 5 p.m. ET on Dec. 14, and said that the tender offers would expire at midnight ET on Dec. 29, with all deadlines subject to possible extension.

ON, a Phoenix-based semiconductor maker, said that total consideration for the 2008 notes, to be paid to those holders tendering their notes and delivering their consents to the proposed indenture changes, would be set using a formula that includes a 50 basis point fixed spread over the yield of the designated reference security, the 2% U.S. Treasury note due May 15, 2006. Total consideration will include a $40 per $1,000 principal amount consent payment.

The amount will be the present value of the $1,060 call price on the first call date of May 15, 2006 plus the interest from the last interest payment date until May 15, 2006, discounted at a rate of 50 basis points over the yield of the reference security. From that figure will be subtracted accrued interest up to but not including the expected initial optional early settlement date and the consent payment.

Total consideration for the 2010 notes will also include the $40 per $1,000 principal amount consent payment, where applicable. It will be set using a formula that includes a 50 basis point fixed spread over the yield of the designated reference security, the 2¼% U.S. Treasury note due Feb. 15, 2007.

The amount will be the present value of the $1,060 call price on the first call date of March 15, 2007 plus the interest from the last interest payment date until March 15, 2007, discounted at a rate of 50 basis points over the yield of the reference security. From that figure will be subtracted accrued interest up to but not including the expected initial optional early settlement date and the consent payment.

In each case holders tendering after the consent deadline will not receive the consent payment. All tendering holders will receive accrued interest up to but excluding the applicable settlement date.

Holders who tender their notes will be required to consent to the proposed amendments and holders who consent will be required to also tender their notes. Completion of the offer is subject to the availability of financing and the satisfaction of a number of conditions. ON Semiconductor is planning to fund the purchase of the notes with cash on hand and net proceeds of new borrowings under a proposed amendment and restatement of its senior secured credit facilities.

Notes and related consents may be withdrawn prior to the applicable consent deadline. Notes may not be withdrawn after the applicable consent deadline and delivery of written notice to the trustee for the notes that certain conditions have been met.

Morgan Stanley & Co. Inc. is the dealer manager and solicitation agent (call Francesco Cipollone at 212 761-1941 or 800 624-1808). Georgeson Shareholder Communications is the information agent (call 800 377-9583; banks and brokerage firms call 212 440-9800.)

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