Microchip Technology Inc. priced a previously announced unregistered notes offering to raise funds for its acquisition of Microsemi Corp.
In the offering, $1 billion of the notes mature June 1, 2021, with an annual interest rate of 3.922%, and $1 billion of the notes will mature June 1, 2023, and bear an annual interest rate of 4.333%. The notes will only be sold to qualified institutional buyers in the U.S.
The Arizona-based semiconductors company will use a combination of the proceeds, cash, and borrowings from an existing revolving credit facility and a new term loan facility to fund the Microsemi deal. If Microchip does not complete the merger on or before June 1, 2019, it will be required to redeem each series of notes at a price equal to 101% of the principal amount along with accrued and unpaid interest.
The offering is expected to close May 29, subject to customary closing conditions.
