Freescale gets commitments for $2.95 billion of notes in offer to replace notes with loans

By Jennifer Chiou

New York, Feb. 27 - Freescale Semiconductor Inc. said it again extended the early commitment date, this time to midnight ET on March 10, after receiving commitments for about $2.95 billion of notes in its offer to issue new incremental term loans under its senior secured credit facility in exchange for some outstanding notes.

The early deadline had previously been prolonged to Feb. 26 from Feb. 24.

Based on the amount of commitments as of 5 p.m. ET on Feb. 26, the company said it would issue about $703 million of the up to $1 billion of term loans in the offer, which was made to holders of its $475 million senior floating-rate notes due 2014, $1.5 billion 9 1/8% - 9 7/8% in-kind - senior pay-in-kind notes due 2014, $2.29 billion 8 7/8% senior fixed-rate notes due 2014 and $1.51 billion 10 1/8% senior subordinated notes due 2016.

Holders of about $2.89 billion of notes had given commitments as of Feb. 24, which would have resulted in the issuance of $694 million of term loans.

The incremental term loans mature on Dec. 15, 2014 and will be guaranteed by the same guarantors under the company's senior secured credit facility. Interest will be 12½% per year, payable quarterly.

For each $1,000 principal amount of notes, holders will receive $246.80 of loans for the toggle notes (including accrued PIK interest), $335.00 for the floaters and 10 1/8% notes and $380.00 for the 8 7/8% notes. The total payments include $25.00 of loans for notes tendered by the early commitment date.

Holders will also receive accrued interest in cash at closing.

The company will accept toggle notes up to a commitment to fund the new loan of $250 million and 10 1/8% notes up to a commitment of $746.27 million.

As of Feb. 24, the company had received commitments from holders of $888.91 million of the toggle notes, $963.89 million of the 10 1/8% notes, $270.49 million of the floaters and $767.98 million of the 8 7/8% notes.

The toggle notes have first priority of acceptance in the offer, followed by the 10 1/8% notes, then the floaters and finally the 8 7/8% notes.

The offer began on Feb. 10 and expires at midnight ET on March 10.

Freescale said the purpose of the note invitations is to improve financial flexibility by reducing debt and related interest expense.

The offer is only for beneficial owners of notes who certify that they are a qualified institutional buyer and either a commercial bank, insurance company, finance company, financial institution or any fund that invests in loans in the ordinary course of business and has total assets of more than $5 million.

The company is also seeking commitments from existing lenders under its senior secured credit facility for the incremental term loans. These commitments will reduce the maximum $1 billion available to noteholders.

Commitments from existing lenders had to be made by 5 p.m. ET on Feb. 19 and must be funded with available funds in dollars by 11 a.m. ET on March 17.

Global Bondholder Services Corp. (866 937-2200 or collect 212 925-1630) is the information agent.

The issuer is an Austin, Texas-based designer and manufacturer of embedded semiconductors.

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