Vishay $450 million convertible talked at 3.125-3.625%, up 60-65%

By Ronda Fears

Nashville, July 30 - Vishay Intertechnology Inc. launched $450 million of 20-year convertible notes talked to yield 3.125 to 3.625% with a 60% to 65% initial conversion premium, for pricing after the close Thursday.

Wachovia Securities, Banc of America Securities and JPMorgan are joint lead managers of the Rule 144A deal. Comerica and Fleet are co-managers.

The subordinated notes will be non-callable for seven years with puts in years five, 10 and 15, payable in cash or stock.

Malvern, Pa.-based Vishay, which makes semiconductors and electronic components, said up to $130 million of proceeds would be used to pay down its revolving credit facility and $176 million to redeem General Semiconductor's 5.75% convertible due 2007, with the rest used for general corporate purposes, including retiring other debt.

The General Semiconductor convert was quoted closing off 0.25 point at 102.5 bid, 103.5 offered.

The new issue is expected to be rated B3 by Moody's Investors Service.

Standard & Poor's Corp. rated the new issue B+, noting that while the refinancing will somewhat weaken debt protection measures it does help to extend the company's debt maturity profile.

Along with the bond offering, Vishay will amend its existing revolving credit facility, extending the maturity to 2007 from 2005 and relaxing minimum tangible net worth and minimum EBIT covenants.

Also Wednesday, Vishay reported second quarter results. Net earnings were $2.88 million, or 2c per share, compared with $15.6 million, or 10c per share, a year earlier. The company said restructuring charges were the primary reason for the decline. Sales gained 17.5% to $538.1 million from $457.9 million.

Vishay shares ended off 22c, or 1.5%, to $14.46.

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