ON Semiconductor gets commitment for additional $75 million of bank debt

By Sara Rosenberg

New York, Sept. 9 - ON Semiconductor Corp. has obtained a commitment for an additional $50 million term loan with terms similar to that of the existing term loan D and a new $25 million revolver due Aug. 4, 2006 with terms substantially similar to those of the existing revolver.

Currently the interest rate on borrowings under the company's senior credit facilities is Libor plus 400 basis points.

The term loan commitment came from JPMorgan Chase Bank, the administrative agent for the company's existing senior bank facilities, and the revolver commitment came from JPMorgan Chase Bank and Morgan Stanley Senior Funding Inc.

The company is permitted to obtain this additional bank debt through the amendment of its credit facility, which also allows for the application of net proceeds from equity offerings and borrowings under the additional term loan facility to prepay scheduled principal installments of all term loan borrowings outstanding under the existing senior bank facilities in chronological order. The amendment also reduces to 50% from 75% the proportion of net proceeds from future equity offerings that must be applied to prepay outstanding term loan borrowings, according to a filing with the Securities and Exchange Commission.

However, the amendment is only effective if the company satisfies certain requirements prior to Dec. 7, including receiving gross cash proceeds of not less than $150 million from a combination of a common stock public offering and borrowings under the additional $50 million term loan, obtaining the $25 million revolver, and applying 100% of the net proceeds from the common stock offering and the proceeds from the new term loan borrowings to repay all outstanding under the existing $62.5 million revolver, to prepay in full the term loan A and term loan R and to prepay scheduled principal installments of all remaining term loan facilities outstanding.

On Tuesday, the company announced that it plans to sell 34.8 million shares of common stock, which at Monday's closing price amounts to approximately $190 million in gross proceeds, bringing it another step closer to successfully obtaining the amendment.

ON Semiconductor is a Phoenix supplier of power and data management semiconductors and standard semiconductor components.

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