ON Semiconductor to launch $1.21 billion term loan B on Tuesday

By Sara Rosenberg

New York, Nov. 6 – ON Semiconductor Corp. will hold a lender call at 9:30 a.m. ET on Tuesday to launch a $1,205,000,000 covenant-light term loan B due March 2023, according to a market source.

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

Compass Bank, Barclays, BOK Financial, Morgan Stanley Senior Funding Inc. and KBC Bank are the co-managers.

Price talk on the term loan is Libor plus 200 basis points with a 0% Libor floor and a par issue price, the source said.

The term loan is getting 101 soft call protection for six months.

Proceeds will be used to reprice an existing term loan down from Libor plus 225 bps with a 0% Libor floor.

With the repricing, the term loan B is being paid down by $400 million to the $1,205,000,000 amount with funds from a revolving credit facility draw.

The company is upsizing its revolver to $1 billion from $600 million as part of this transaction, so its liquidity position will be unchanged as it is essentially drawing the same amount as the upsize.

Commitments from existing lenders are due at noon ET Nov. 13 and from new lenders are due at noon ET on Tuesday, the source added.

ON Semiconductor is a Phoenix-based semiconductor company.

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