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Microsemi reveals price talk on roughly $2.4 billion credit facility
By Sara Rosenberg
New York, Dec. 2 – Microsemi Corp. released price talk on its $2,425,000,000 senior secured credit facility in connection with its bank meeting on Wednesday, according to a market source.
The $350 million five-year revolver and $650 million five-year term loan A are talked at Libor plus 225 basis points to 250 bps with no floor and an original issue discount of 99.625, and the $1,425,000,000 seven-year covenant-light term loan B is talked at Libor plus 375 bps to 400 bps with a 0.75% Libor floor and a discount of 98 to 98.5, the source said.
Included in the term loan B is 101 soft call protection for six months.
The revolver has maximum total net leverage and minimum fixed charge coverage covenants.
Morgan Stanley Senior Funding Inc., the Bank of Tokyo-Mitsubishi UFJ Ltd. and Deutsche Bank Securities Inc. are the lead arrangers and bookrunners on the deal.
Proceeds will be used to help fund the acquisition of PMC-Sierra Inc. and refinance existing debt.
Under the agreement, PMC shareholders will receive $9.22 in cash and 0.0771 of a share of Microsemi common stock for each share of PMC common stock through an exchange offer. The transaction is valued at about $2.5 billion.
Other funds for the transaction will come from cash on hand and Microsemi common stock.
Closing is expected in the first quarter of 2016, subject to regulatory approvals, the tender of at least a majority of the outstanding shares of PMC’s common stock and customary conditions.
Microsemi is an Aliso Viejo, Calif.-based provider of semiconductor solutions. PMC is a Sunnyvale, Calif.-based fabless semiconductor company.
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