ON Semiconductor to redeem some 12% '10 and '08 notes with stock-offering proceeds

New York, Jan, 27 - ON Semiconductor Corp. (B3/B) announced plans for a common stock offering and said that it would use part of its share of the expected net proceeds to redeem some of its 12% first lien senior secured notes due 2010 and its 12% second lien senior secured notes due 2008 through the exercise of the equity clawback provision.

ON Semiconductor, a Phoenix-based semiconductor manufacturer, issued $200 million of the 12% 2010 notes in February 2003, and along with its Semiconductor Components Industries LLC unit, issued $300 million of the 12% 2008 notes in May 2002. Each series of notes has a provision for an equity clawback repurchase of 35% of the issue at a price of 112 for the first three years after issue.

The company said it plans to sell 47 million shares of common stock, with 34 million to be offered for sale by the company and the other 13 million by a selling stockholder. ON Semiconductor will receive no proceeds from the shares sold by the stockholder. The company and the stockholder also propose to grant underwriters a greenshoe option to purchase an additional 7.05 million shares.

Besides the planned note redemptions, the company intends to use any remaining proceeds for general corporate purposes, which may include additional reductions in its outstanding debt.

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