Matthews South

Matthews South

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by | February 28, 2023 |

Our Clients

May 11, 2021
$700mm Convertible Offering
Size: $700mm + 15% Shoe
Maturity: 6 Years
Execution Structure: 1 Day Marketed
Maturity: May 1, 2027
Structure: Provisional Call with Make-Whole in Year 3
Coupon: 0.00%
Premium: 42.5%
Effective Premium: 100% with Call Spread
Stock Price Impact: +0.41%
Matthews South Role: Financial Advisor
Active Bookrunners: Bank of America / Morgan Stanley / Citi

On Semi: Capital Structure Management & Convertible Execution

Transaction and Process Overview


Structuring

  • Matthews South designed the complex, multiple step transaction to achieve ON Semi’s specific balance sheet optimization objectives
    • We advised the company on:
      1. Amendment of its credit facility
      2. Issuance of a new convertible and call spread
      3. Repurchase of the existing convertible
      4. Unwind of the existing call spread
    • Matthews South helped the company navigate multiple work streams for efficient execution

Call Spread Process

  • Our bid process optimized pricing and allowed the company to achieve an after-tax yield of 0.72% (inclusive of the call spread cost) with an effective conversion premium of 100% (no dilution until stock more than doubles)

Marketing and Pricing

  • Matthews South helped to ensure that the security was priced optimally
  • On Semi achieved zero interest expense on a 6-year security and an effective conversion price that is at a 69% premium over its 52-week high
  • We saved the company $10mm+ on the overall transaction by
    1. Improving convertible pricing
    2. Upgrading documentation
    3. Conducting an efficient call spread bid, and
    4. Aiding negotiation on repurchase of existing convertible and associated call spread unwinds

Additional Deals for onsemi:

  • Feb 2023: $1.3bn Convertible + Call Spread

Contact Us

To learn more about our solutions or to schedule a demo of our software, please contact us by filling out the form below, or email us at info@matthewssouth.com.






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