ON Semiconductor to price $500 million eight-year notes on Tuesday; initial talk low 4% area

By Paul A. Harris

Portland, Ore., Aug. 17 – ON Semiconductor Corp. plans to price a $500 million offering of eight-year senior notes on Tuesday, according to market sources.

The deal was set to kick off on a mid-morning investor conference call on Monday.

Initial guidance is in the low 4% area, a bond trader said.

BofA Securities Inc., BBVA Securities Inc., BMO Capital Markets Corp., Citigroup Global Markets Inc., Deutsche Bank Securities Inc., HSBC Securities (USA) Inc., J.P. Morgan Securities LLC, MUFG and SMBC Nikko Securities America Inc. are the joint bookrunners.

Barclays, BOK Financial Securities Inc. and Morgan Stanley & Co. LLC are the co-managers.

The Rule 144A and Regulation S for life notes become callable after three years at par plus 50% of the coupon. They feature a three-year 40% equity clawback and a 101% poison put.

The Phoenix-based semiconductor supplier plans to use the proceeds, together with cash on hand, to repay its approximately $1 billion outstanding revolver balance.

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