By Abigail W. Adams
Portland, Me., Sept. 8 – Vishay Intertechnology Inc. priced an upsized $650 million of seven-year convertible notes (BB+) after the market close on Thursday at par with a coupon of 2.25% and an initial conversion premium of 20%, according to company news release.
Pricing came in line with talk for a fixed coupon of 2.25% and at the cheap end of talk for an initial conversion premium of 20% to 25%, according to a market source.
J.P. Morgan Securities LLC was sole bookrunner for the Rule 144A offering, which carries an upsized greenshoe of $100 million.
The initial size of the offering was $600 million with 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 entered into capped call transactions with a cap price of $43.98, which represents a 75% premium over the last reported price of stock.
The company entered into privately negotiated transactions to repurchase $370.2 million in principal of its 2.25% convertible notes due 2025 for $388.8 million in cash.
Net proceeds are expected to be $632.7 million or will be $730.2 million if the greenshoe is exercised in full.
Approximately $81.6 million of net proceeds will be used to cover the cost of the call spread; $388.8 million will be used to fund the repurchase of the 2025 notes; and $162.3 million will be used to repay borrowings under its senior secured credit facility.
Any remaining proceeds will be used for general corporate purposes.
Vishay is a Malvern, Pa.-based semiconductor manufacturer.
| Issuer: | Vishay Intertechnology Inc.
|
| Amount: | $650 million
|
| Greenshoe: | $100 million
|
| Issue: | Convertible senior notes
|
| Maturity: | Sept. 15, 2030
|
| Bookrunner: | J.P. Morgan Securities LLC
|
| Coupon: | 2.25%
|
| Price: | Par
|
| Yield: | 2.25%
|
| Conversion premium: | 20%
|
| Conversion price: | $30.16
|
| Conversion rate: | 33.1609
|
| Call options: | Non-callable until Sept. 20, 2027 and then subject to a 130% hurdle
|
| Put options: | Upon a fundamental change
|
| Pricing date: | Sept. 7
|
| Settlement date: | Sept. 12
|
| Rating: | S&P: BB+
|
| Distribution: | Rule 144A
|
| Talk: | Fixed coupon of 2.25% and initial conversion premium of 20% to 25%
|
| Stock symbol: | NYSE: VSH
|
| Stock price: | $25.13 at market close Sept. 7
|
| Market capitalization: | $3.49 billion
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