Microchip privately exchanges convertible notes into shares, cash

Chicago, Aug. 12 – Microchip Technology Inc. privately negotiated with holders of three convertible bonds to exchange their bonds for shares and cash, according to a press release on Thursday.

Holders of $70.4 million of the company’s 1.625% convertible senior subordinated notes due 2025, $100.7 million of its 1.625% convertible senior subordinated notes due 2027 and $92.5 million of its 2.25% convertible junior subordinated notes due 2037 participated in the exchange.

In total, Microchip is delivering an estimated 2.7 million shares of its common stock and $266 million in cash, including interest. The amounts are subject to adjustment based on a one-day measurement period ending Aug. 12 and could change based on the trading price of the common stock during the measurement period.

The transactions are expected to close on Aug. 17.

After they close, $71 million of the 2025 notes will remain outstanding, $232.7 million of the 2027 notes will be outstanding and $30.1 million of the 2037 notes will remain outstanding.

Funding for the cash portion will come from borrowings under the 2018 credit agreement, which lists JPMorgan Chase Bank, NA as administrative agent.

Microchip Technology is a Chandler, Ariz., manufacturer of microcontroller, memory and analog semiconductors.

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