Semtech seeks to raise $250 million in convertible private placement

Chicago, Oct. 19 – Semtech Corp. is exploring private placement distribution for a new offering of convertible senior notes due 2028, according to an 8-K filing and a Thursday morning press release.

The company met with a number prospective institutional investors on Wednesday and is planning, subject to market conditions, to issue $250 million of the new notes.

The notes would be sold to qualified institutional buyers under Rule 144A and accredited investors under Rule 501(a).

Proceeds, with cash on hand, would be used to prepay $250 million of term loans outstanding under the company’s credit agreement.

The company was pushing up against its leverage requirements under its covenants on its debt agreements when the company reported earnings in September, according to the Prospect News archive.

As of Thursday, Semtech has amended a credit agreement from Sept. 26, 2022 to extend covenant relief through April 30, 2026 and increase the maximum consolidated leverage ratio covenant for certain test periods, with certain other changes.

Semtech is a Camarillo, Calif.-based supplier of high-performance analog and mixed-signal semiconductors and advanced algorithms.

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