ON Semiconductor ups term loan B to $2.2 billion, revises OID to 98.5

By Sara Rosenberg

New York, March 16 – ON Semiconductor Corp. lifted its seven-year covenant-light term loan B to $2.2 billion from $2 billion and tightened the original issue discount to 98.5 from 98, according to market sources.

Also, the 101 soft call protection on the term loan B was extended to one year from six months and the MFN sunset was eliminated, sources said.

Pricing on the term loan is still Libor plus 450 basis points with a 0.75% Libor floor.

The company’s credit facility also includes a five-year revolver that will be upsized to at least $600 million from $400 million, sources continued.

Deutsche Bank Securities Inc., Bank of America Merrill Lynch, HSBC Securities (USA) Inc. and SMBC are the bookrunners on the deal.

Recommitments are due by 11 a.m. ET on Thursday.

Proceeds will be used to fund the acquisition of Fairchild Semiconductor International Inc. for $20.00 per share in an all-cash transaction valued at about $2.4 billion.

Funds from the term loan B upsizing and a $200 million draw under the revolver will replace the company’s prior plans for a $400 million senior unsecured notes offering.

Closing on the acquisition is expected in the second quarter.

The term loan will fund into escrow no later than 31 days following allocation and the original issue discount will be earned at funding into escrow, sources added.

ON Semiconductor is a Phoenix-based semiconductor company. Fairchild Semiconductor is a San Jose, Calif.-based semiconductor company.

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