Microchip Technology Announces Proposed Private Offering of $1.1 Billion of Convertible Senior Notes
28 Mai 2024 - 10:01PM
(NASDAQ: MCHP) – Microchip Technology Incorporated, a leading
provider of smart, connected, and secure embedded control
solutions, today announced its intention to offer, subject to
market conditions and other factors, $1.1 billion aggregate
principal amount of Convertible Senior Notes due 2030 (the “notes”)
in a private offering (the “offering”) only to persons reasonably
believed to be qualified institutional buyers pursuant to Rule 144A
under the Securities Act of 1933, as amended (the “Securities
Act”). Microchip also expects to grant the initial purchasers of
the notes an option to purchase, within a 13-day period
beginning on, and including, the date Microchip first issues the
notes, up to an additional $150 million aggregate principal
amount of the notes. The notes will be senior, unsecured
obligations of Microchip, and interest will be payable
semi-annually in arrears. Upon conversion, Microchip will pay cash
up to the aggregate principal amount of the notes to be converted
and pay or deliver, as the case may be, cash, shares of Microchip’s
common stock (“common stock”) or a combination of cash and shares
of common stock, at Microchip’s election, in respect of the
remainder, if any, of its conversion obligation in excess of the
aggregate principal amount of the notes being converted. The
interest rate, conversion rate and other terms of the notes are to
be determined upon pricing of the offering.
Microchip intends to use a portion of the net proceeds of the
offering to pay the cost of capped call transactions with the
option counterparties, as described below. If the initial
purchasers exercise their option to purchase additional notes,
Microchip expects to use a portion of the net proceeds from the
sale of such additional notes to enter into additional capped call
transactions with the option counterparties. Microchip intends to
use the remaining net proceeds to repay existing debt including
notes outstanding under Microchip’s commercial paper program.
In connection with the pricing of the notes, Microchip expects
to enter into privately negotiated capped call transactions with
one or more of the initial purchasers and/or their respective
affiliates and/or other financial institutions (the “option
counterparties”). The capped call transactions will cover, subject
to anti-dilution adjustments, the number of shares of common stock
underlying the notes sold in the offering. The capped call
transactions are generally expected to reduce potential dilution to
the common stock upon any conversion of notes and/or offset any
cash payments Microchip elects to make in excess of the principal
amount of converted notes, as the case may be, with such reduction
and/or offset subject to a cap.
Microchip has been advised that, in connection with establishing
their initial hedges of the capped call transactions, the option
counterparties or their respective affiliates expect to purchase
shares of common stock and/or enter into various derivative
transactions with respect to the common stock concurrently with or
shortly after the pricing of the notes. This activity could
increase (or reduce the size of any decrease in) the market price
of the common stock or the notes at that time. In addition, the
option counterparties or their respective affiliates may modify
their hedge positions by entering into or unwinding various
derivatives with respect to the common stock and/or purchasing or
selling the common stock or other securities of Microchip in
secondary market transactions following the pricing of the notes
and prior to the maturity of the notes (and are likely to do so
during any observation period related to a conversion of the notes
and, to the extent Microchip unwinds a corresponding portion of the
capped call transactions, following any repurchase or redemption of
the notes). This activity could also cause or avoid an increase or
a decrease in the market price of the common stock or the notes,
which could affect the ability of noteholders to convert the notes
and, to the extent the activity occurs during any observation
period related to a conversion of notes, it could affect the number
of shares and value of the consideration that noteholders will
receive upon conversion of the notes.
The notes will only be offered to persons reasonably believed to
be qualified institutional buyers pursuant to Rule 144A under the
Securities Act. Neither the notes nor the shares of common stock
potentially issuable upon conversion of the notes, if any, have
been, or will be, registered under the Securities Act or the
securities laws of any other jurisdiction, and unless so
registered, may not be offered or sold in the United States except
pursuant to an applicable exemption from such registration
requirements.
This announcement is neither an offer to sell nor a solicitation
of an offer to buy any of these securities and shall not constitute
an offer, solicitation or sale in any jurisdiction in which such
offer, solicitation or sale is unlawful.
The Microchip logo and name are registered
trademarks of Microchip Technology Incorporated.
INVESTOR RELATIONS CONTACT:
Eric Bjornholt – CFO … (480) 792-7804 Sajid
Daudi – Head of investor Relations … (480) 792-7385
Microchip Technology (NASDAQ:MCHP)
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