STMicroelectronics plans $1.5 billion five-, seven-year convertibles

By Stephanie N. Rotondo

Seattle, June 22 – STMicroelectronics NV announced a two-tranche $1.5 billion offering of senior convertible bonds on Thursday.

Each tranche will come at a minimum size of $500 million.

The deal will consist of five-year convertibles to be issued at between 100% and 102.53% of par for a yield of negative 0.5% to 0% with an initial conversion premium of 35% to 40% and seven-year paper to be priced at par and talked with a 0% to 0.5% yield and an initial conversion premium of 35% to 40%.

Morgan Stanley & Co. LLC and Société Générale CIB are the joint global coordinators and joint bookrunners. Citigroup Global Markets Inc., J.P. Morgan Securities LLC and UniCredit are also acting as joint bookrunners.

Pricing is scheduled for later on Thursday.

The convertibles sale is being done in connection with the early redemption of the company’s $600 million of 0% convertible notes due 2019, as well as the launch of a share buy-back program aimed at meeting obligations arising from debt instruments that are exchangeable into equity and to meet share award program obligations.

Specifically, proceeds will be used for general corporate purposes, including the early redemption of the 2019 notes and the future redemption of the $400 million outstanding 1% convertible notes due 2021.

Conversions of the new bonds will be settled in cash, ordinary stock or a combination of the two, at the company’s option.

STMicroelectronics is an Amsterdam-based semiconductor manufacturing company.

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