Chartered Semiconductor plans tender for up to $450 million of convertibles, may tender for all

New York, July 21 - Chartered Semiconductor Manufacturing said it plans to start a tender offer for up to $450 million principal amount of its $575 million of 2.5% senior convertible notes due April 2006 using proceeds of a planned public offering of $450 million of senior notes and cash on hand.

The redemption amount for the senior notes including their yield to maturity is $664 million, Chartered said.

The Milpitas, Calif.-based semiconductor foundry plans to start the tender as soon as possible after completing the sale of the senior notes.

In addition, Chartered said it may decide to expand the tender to cover all its outstanding convertibles by also using proceeds from a planned private placement of $250 million of units of redeemable preference shares due 2010 and amortizing bonds due 2010.

"Chartered strives to be proactive and forward-looking in managing its finances," said George Thomas, senior vice president and chief financial officer, in a news release.

"There are several benefits in undertaking this plan now: first, funds raised will allow us the flexibility to either repay the existing convertible notes when due in 2006 or to repurchase those earlier; second, the plan also satisfies our de-leveraging objectives by refinancing a smaller portion of the debt (represented by the existing convertible notes) with equity (represented by the units private placement); third, we are substantially lengthening our debt maturity profile, at a time when interest rates are low."

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