Electronics & Computers

Freescale Announces Term Loan Increase

September 11, 2013

The facility increase from $300 million to $800 million will be used to redeem, repurchase, or otherwise acquire senior secured notes and to pay related redemption premiums and fees.

AUSTIN, TX /BUSINESS WIRE/ -- Freescale Semiconductor Inc., a wholly owned subsidiary of Freescale Semiconductor Ltd., announced that Freescale has been advised by the arrangers under its proposed new senior secured term loan facility that they have received sufficient orders to upsize the proposed new term loan facility to $800 million from the original $300 million proposed at the outset of the offering. The proceeds from the proposed new term loan facility are intended to be used to redeem, repurchase, or otherwise acquire all of Freescale's outstanding 10?% senior secured notes due 2018 and a portion of its 9¼% senior secured notes due 2018, and to pay related redemption premiums and fees. Freescale will pay for a portion of its expenses with cash on hand. The foregoing does not constitute a notice of redemption for any outstanding notes. The purposes of the transaction and the application of the proceeds are to extend a portion of Freescale's debt maturities and reduce interest expense.

The proposed new term loan facility is expected to mature in January 2021. The maturity may be accelerated to March 2018 under specified circumstances. The new term loan is expected to bear interest at a rate equal to LIBOR plus 3.75% (with LIBOR of not less than 1.25%). The closing of the proposed new term loan facility, which is expected to occur on September 11, 2013, is subject to customary conditions, and there can be no assurance that Freescale will be successful in obtaining the proposed new term loan facility on reasonably acceptable terms, or at all.

The proposed new term loan facility will be effected as an amendment to the existing senior secured credit facilities. The secured credit facilities contain a provision that requires the weighted average yield of existing term loans under the facilities to be no less than 0.5% below the weighted average yield of certain new term loans issued under the facilities. Consequently, as of the closing of the new term loan facility, the existing $349 million term loan facility due 2016 is expected to bear interest at a rate of 4.8%, an increase of 0.5%. The company expects cash interest savings related to this transaction to be approximately $26 million on an annualized basis.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities.

About Freescale Semiconductor
Freescale Semiconductor is a global leader in embedded processing solutions, providing industry-leading products advancing the automotive, consumer, industrial, and networking markets. From microprocessors and microcontrollers to sensors, analog integrated circuits, and connectivity—our technologies are the foundation for the innovations that make our world greener, safer, healthier, and more connected. Some of our key applications and end markets include automotive safety, hybrid and all-electric vehicles, next-generation wireless infrastructure, smart energy management, portable medical devices, consumer appliances, and smart mobile devices. The company is based in Austin, TX, and has design, research and development, manufacturing, and sales operations around the world.

Freescale and the Freescale logo are trademarks of Freescale Semiconductor Inc. All other product or service names are the property of their respective owners.

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