Freescale gets noteholder consent to skip change-of-control offer

By Angela McDaniels

Tacoma, Wash., April 2 – Freescale Semiconductor, Ltd. indirect subsidiary Freescale Semiconductor, Inc. received enough consents to amend its $500 million of dollar-denominated 5% senior secured notes due 2021 and $960 million of dollar-denominated 6% senior secured notes due 2022, according to a company news release.

The consent solicitation began March 23 and ended at 5 p.m. ET on April 2.

Freescale received consents for more than two-thirds of the outstanding notes of each series. Accordingly, supplemental indentures have been entered into containing amendments and waivers.

The issuer is undertaking the consent solicitations at the request and expense of NXP Semiconductors NV, which has agreed to acquire Freescale. The consent solicitations are not a condition to the completion of the merger.

The company asked noteholders to approve amendments to, and to waive some provisions of, the indentures governing the notes.

The waivers will, among other things, waive the noteholders’ right to require the issuer to repurchase their notes as a result of the change of control resulting from the merger.

The proposed amendments will align the restricted group subject to the covenants in the indentures governing the notes with the restricted group subject to the covenants in the indentures governing NXP’s notes and align some other indenture provisions with the terms of the indentures governing NXP’s notes.

Freescale said the effect of the amendments, together with the guarantee to be provided by NXP if the merger is consummated, include Freescale becoming significantly less leveraged following the merger than it currently is on a stand-alone basis and the notes receiving the benefit of existing NXP collateral.

The waivers are effective and operative. The amendments have become effective but will not be operative until the merger is concluded.

Holders who consented will receive $5 per $1,000 principal amount of notes. The cash payment will be made by NXP shortly prior to the completion of the merger.

The lead solicitation agent is Credit Suisse Securities (USA) LLC (800 820-1653 or 212 325-2476). Barclays Capital Inc., BofA Merrill Lynch, Deutsche Bank Securities Inc. and Morgan Stanley & Co. LLC are additional solicitation agents. The information agent is D.F. King & Co., Inc. (212 269-5550, 800 499-8519 or fsl@dfking.com).

Freescale and NXP are semiconductor makers based in Austin, Texas, and Eindhoven, the Netherlands, respectively.

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