STMicroelectronics to price $1.5 billion 0% convertible bonds in five- and seven-year tranches

By Abigail W. Adams

Portland, Me., July 28 – STMicroelectronics NV plans to price $1.5 billion 0% convertible bonds in five- and seven-year tranches on Tuesday, according to a market source.

Each tranche will be a minimum of $500 million.

Price talk for the five-year tranche is for an offer price of 104.5 to 107.1 to yield negative 1.36% to negative 0.88% and an initial conversion premium of 45% to 50%.

Price talk for the seven-year tranche is for an offer price of 102.7 to 106.3 to yield negative 0.87% to 0.38% and an initial conversion premium of 50% to 55%.

BNP Paribas Securities Corp., J.P. Morgan Securities LLC and UniCredit CIB are joint global coordinators and bookrunners for the Regulation S offering.

Citigroup Global Markets Ltd., IMI – Intesa Sanpaolo, Morgan Stanley & Co. International plc and Natixis are also joint bookrunners.

The five-year tranche is non-callable for three years and then subject to a 130% hurdle.

The seven-year tranche is non-callable for four years and then subject to a 130% hurdle.

The bonds are putable upon a fundamental change. There is dividend protection.

The reference price will be the volume weighted average of the company’s shares on the Italian Stock Exchange on Tuesday.

The exchange rate from euros into U.S. dollars will be determined at the time of pricing.

Proceeds will be used to redeem the outstanding $750 million of the company’s 0% convertible bonds due 2022 and for general corporate purposes.

STMicroelectronics is a Geneva, Switzerland-based electronics and semiconductor company.

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