Vishay talks $600 million seven-year convertibles with fixed coupon of 2.25%, up 20%-25%

By Abigail W. Adams

Portland, Me., Sept. 6 – Vishay Intertechnology Inc. plans to price $600 million of seven-year convertible notes (BB+) after the market close on Thursday with price talk for a fixed coupon of 2.25% and an initial conversion premium of 20% to 25%, according to a market source.

J.P. Morgan Securities LLC is sole bookrunner for the Rule 144A offering, which carries a greenshoe of $90 million.

The notes are non-callable until Sept. 20, 2027 and then subject to a 130% hurdle.

They are putable upon a fundamental change.

The notes will be settled in cash up to the principal amount with any remaining amounts to be settled in cash, shares or a combination of both.

In connection with the offering, the company will enter into capped call transactions.

The company will also enter into privately negotiated transactions to repurchase a portion of its 2.25% convertible notes due 2025.

Proceeds will be used to cover the cost of the call spread and fund the repurchase of the 2025 notes with any remaining amount to be used for general corporate purposes.

Vishay is a Malvern, Pa.-based semiconductor manufacturer.

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