ON Semiconductor increases revolver to $1 billion, extends maturity

By Marisa Wong

Madison, Wis., May 4 – ON Semiconductor Corp. amended its existing $800 million five-year senior revolving credit facility on May 1 to, among other things, increase the borrowing capacity to $1 billion and extend the term of the facility, according to an 8-K filing with the Securities and Exchange Commission.

The company said the increase in the borrowing capacity is intended to enhance its liquidity and its ability to effect its general corporate purposes. There is currently $350 million of borrowings outstanding under the facility, the filing noted.

The new facility includes $15 million availability for the issuance of letters of credit, $15 million availability for swingline loans for short-term borrowings and a foreign currency sublimit of $75 million.

The company may increase the size of the facility from time-to-time in increments of $10 million, as long as the aggregate amount of all increases does not exceed $500 million.

The facility matures on May 1, 2020.

Interest is equal to Libor plus an applicable rate based on the total leverage ratio, ranging from 125 basis points to 225 bps. There is a commitment fee that ranges from 25 bps to 45 bps, also based on the total leverage ratio.

The credit agreement contains only two financial covenants: a maximum total leverage ratio of 3.75 to 1.00 and a minimum interest coverage ratio of 3.50 to 1.0.

The company entered into the original credit facility on Oct. 10, 2013 with JPMorgan Chase Bank, NA as administrative agent.

The semiconductor company is based in Phoenix.

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