By Abigail W. Adams
Portland, Me., May 28 – Silicon Laboratories Inc. priced $500 million of five-year convertible notes after the market close on Wednesday at par at the midpoint of talk with a coupon of 0.625% and an initial conversion premium of 35%, according to a company news release.
Price talk was for a coupon of 0.375% to 0.875% and an initial conversion premium of 32.5% to 37.5%, according to a market source.
Morgan Stanley & Co. LLC (lead left), Wells Fargo Securities LLC, Citigroup Global Markets Inc. and BofA Securities Inc. were bookrunners for the Rule 144A offering, which carries a greenshoe of $35 million.
The notes are contingently convertible until March 15, 2025.
They are non-callable until June 20, 2023 and then subject to a 130% hurdle.
The notes are putable upon a fundamental change.
The notes will be settled in cash, shares or a combination of both at the company’s option.
Net proceeds are expected to be $490.1 million, or $524.5 million if the greenshoe is exercised in full.
Proceeds will be used to repay $310 million of borrowings under its credit facility.
Remaining proceeds and cash on hand will be used to repurchase $236.8 million of the principal amount of the company’s 1.375% convertible notes due 2022 for $277.8 million in cash in privately negotiated transactions.
The company may invest proceeds in short-term interest-bearing investment-grade securities or money market obligations pending their application.
Silicon Labs is an Austin, Tex.-based semiconductor company.
| Issuer: | Silicon Laboratories Inc.
|
| Securities: | Convertible senior notes
|
| Amount: | $500 million
|
| Greenshoe: | $35 million
|
| Maturity: | June 15, 2025
|
| Bookrunners: | Morgan Stanley & Co. LLC (lead left), Wells Fargo Securities LLC, Citigroup Global Markets Inc. and BofA Securities Inc.
|
| Coupon: | 0.625%
|
| Price: | Par
|
| Yield: | 0.625%
|
| Conversion premium: | 35%
|
| Conversion price: | $122.70
|
| Conversion rate: | 8.1498
|
| Call options: | Non-callable until June 20, 2023 and then subject to a 130% hurdle
|
| Put options: | Upon a fundamental change
|
| Pricing date: | May 28
|
| Settlement date: | June 1
|
| Distribution: | Rule 144A
|
| Talk: | Coupon of 0.375% to 0.875% and initial conversion premium of 32.5% to 37.5%
|
| Stock symbol: | Nasdaq: SLAB
|
| Stock price: | $90.89 at market close May 27
|
| Market capitalization: | $3.97 billion
|
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