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ON Semiconductor reprices term loan at lower rate, adds step down
By Sara Rosenberg
New York, Feb. 7 - ON Semiconductor Corp. closed on an amended and restated credit facility that repriced its $639.1 million of term loan debt at a lower interest rate and added the potential for a step down in spread, according to a company news release.
The term loan debt is now priced with an interest rate of Libor plus 250 basis points compared to previous pricing of Libor plus 275 bps.
Furthermore, pricing can drop to Libor plus 225 bps if the company has a credit rating of at least B2 with a stable outlook and meets a specified leverage ratio test that would first apply based on the 2005 fiscal year results.
The company currently anticipates it should meet this step down condition on or around the filing of its form 10-K for the year ended Dec. 31.
"The reduction of the spread on our senior secured credit facilities is attributable to the improving financial performance of the company," said Donald Colvin, senior vice president and chief financial officer, in the release.
"As part of our long-term financial strategy, we plan to use the cash generated from operations to reduce our overall debt levels."
ON Semiconductor is a Phoenix-based designer, manufacturer and marketer of power and data management semiconductors and standard semiconductor components.
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