ON Semiconductor starts roadshow for $300 million six-year notes next week

By Paul A. Harris

St. Louis, Mo., April 18 - ON Semiconductor Corp. and its Semiconductor Components Industries LLC subsidiary will start the roadshow for its $300 million note offering during the week of April 22, according to the company.

"We'll be on the road all of next week and we hope to price before May 10," said Rudy Garcia, the Phoenix, Ariz.-based company's director of investor relations.

He added that the deal will likely price during the week of April 29.

The company will bring $300 million of new six-year senior secured notes via joint bookrunners Credit Suisse First Boston and Morgan Stanley, Garcia said.

Co-managers include JP Morgan and Salomon Smith Barney.

According to a press release, ON Semiconductor will use the proceeds to prepay a portion of Semiconductor Components' term loans under its senior bank facilities.

"It's always been a strategy of the company to de-lever on the bank side," Garcia commented. "We're looking at all opportunities to do that. There are many ways and this is just one.

"Earlier in the year when we were looking at opportunities this seemed to be the best opportunity, given where our other securities were priced. A month ago our stock was below $4."

Texas Pacific Group is the company's primary stockholder, Garcia said.

Referring to the company's results which were released Wednesday Garcia said "Everything is fairly stable.

"We just announced revenues up 1%. We, as a company, have been working on our cost structure. So we've had significant expansion in our margin and our EBITDA and our bottom line results.

"Overall environment looks to be in a very stable mode."

Characterizing ON Semiconductor's end users as "diverse," Garcia said that Motorola, which used to be ON's parent, is the largest customer, at 8%.

"Our biggest markets are the automotive, and the consumer and industrial computer markets," he added. "Wireless is becoming a good market for us, as well.

"The only one that's really down is networking - telecom, which you can understand. That's pretty much down for the industry."

Garcia said ON Semiconductor has one issue of high yield bonds outstanding, $260 million of 12% notes due 2009, which are callable in 2004.

According to a market source the company's new six-year senior secured notes will be callable in three years, however Garcia declined to confirm any structural details on ON Semiconductors' new bonds.

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