NXP enters into cash convertible note hedge, warrant transactions for $1 billion notes deal

By Toni Weeks

San Luis Obispo, Calif., Nov. 25 – NXP Semiconductors NV entered into separate privately negotiated cash convertible note hedge and warrant transactions with counterparties in connection with its pricing of $1 billion principal amount of 1% cash convertible senior notes due 2019 on Tuesday, according to an 8-K filing with the Securities and Exchange Commission.

The warrant transactions will be net share settled upon exercise. The strike price will initially be $133.32 per share, which represents a premium of 75% over the $76.18 closing share price of NXP stock on Nov. 24.

The cash convertible note hedge transactions will be cash settled upon exercise and are expected to offset any cash payments NXP is required to make in excess of the principal amount of the notes upon conversion.

If the initial purchasers exercise their over-allotment option to purchase up to another $150 million of additional notes, NXP may enter into additional cash convertible note hedge and warrant transactions, the filing said.

Proceeds from the senior note offering will fund, among others, the cost of entering into the cash convertible note hedge transactions, the cost of which will be partially offset by the proceeds that NXP will receive from entering into warrant transactions.

Eindhoven, the Netherlands-based NXP makes mixed-signal solutions and semiconductor components.

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