Freescale Semiconductor Announces Increase of New Term Loan Facility from $300 million to $800 milli
Freescale Semiconductor Announces Increase of New Term Loan Facility from $300 million to $800 million
AUSTIN, Texas--(BUSINESS WIRE)-- Freescale Semiconductor, Inc. ("Freescale"), a wholly owned subsidiary of Freescale Semiconductor, Ltd. (NYS: FSL) , announced today that Freescale has been advised by the arrangers under its proposed new senior secured term loan facility that they have received sufficient orders to upsize the proposed new term loan facility to $800 million from the original $300 million proposed at the outset of the offering. The proceeds from the proposed new term loan facility are intended to be used to redeem, repurchase or otherwise acquire all of Freescale's outstanding 10⅛% senior secured notes due 2018 and a portion of its 9¼% senior secured notes due 2018, and to pay related redemption premiums and fees. Freescale will pay for a portion of its expenses with cash on hand. The foregoing does not constitute a notice of redemption for any outstanding notes. The purposes of the transaction and the application of the proceeds are to extend a portion of Freescale's debt maturities and reduce interest expense.
The proposed new term loan facility is expected to mature in January 2021. The maturity may be accelerated to March 2018 under specified circumstances. The new term loan is expected to bear interest at a rate equal to LIBOR plus 3.75% (with LIBOR of not less than 1.25%). The closing of the proposed new term loan facility, which is expected to occur on September 11, 2013, is subject to customary conditions, and there can be no assurance that Freescale will be successful in obtaining the proposed new term loan facility on reasonably acceptable terms, or at all.
The proposed new term loan facility will be effected as an amendment to the existing senior secured credit facilities. The secured credit facilities contain a provision that requires the weighted average yield of existing term loans under the facilities to be no less than 0.5% below the weighted average yield of certain new term loans issued under the facilities. Consequently, as of the closing of the new term loan facility, the existing $349 million term loan facility due 2016 is expected to bear interest at a rate of 4.8%, an increase of 0.5%. The company expects cash interest savings related to this transaction to be approximately $26 million on an annualized basis.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities.
Cautionary Note Regarding Forward-Looking Statements
This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 relating to the proposed new term loan facility, the use of proceeds therefrom and the estimated cash interest savings. Although we believe the assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate and the forward-looking statements based on these assumptions could be incorrect. The closing of the proposed new term loan facility is subject to customary conditions and involves risks and uncertainties, many of which are outside our control, and any one of which, or a combination of which, could materially affect our ability to enter into the term loan facility described above. Some of these risks and uncertainties include general economic, political and business conditions, uncertainty in the credit markets, unwillingness of lenders to fund commitments associated with the new term loan facility as well as other matters described under "Risk Factors" in our Annual Report on Form 10-K/A and other filings with the SEC. We undertake no obligation to update any information contained in this press release.
About Freescale Semiconductor
Freescale Semiconductor (NYS: FSL) is a global leader in embedded processing solutions, providing industry leading products that are advancing the automotive, consumer, industrial and networking markets. From microprocessors and microcontrollers to sensors, analog integrated circuits and connectivity - our technologies are the foundation for the innovations that make our world greener, safer, healthier and more connected. Some of our key applications and end-markets include automotive safety, hybrid and all-electric vehicles, next generation wireless infrastructure, smart energy management, portable medical devices, consumer appliances and smart mobile devices. The company is based in Austin, Texas, and has design, research and development, manufacturing and sales operations around the world. www.freescale.com
Freescale and the Freescale logo are trademarks of Freescale Semiconductor, Inc., Reg. U.S. Pat. & Tm Off. All other product or service names are the property of their respective owners. © 2013 Freescale Semiconductor, Inc.
Mitch Haws, 512-895-2454
KEYWORDS: United States North America Texas
The article Freescale Semiconductor Announces Increase of New Term Loan Facility from $300 million to $800 million originally appeared on Fool.com.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.