Semtech Up-sizes Convertible Senior Notes Offering To $300 Mln

(RTTNews) - Semtech Corporation (SMTC), a supplier of signal semiconductors and advanced algorithms, said on Friday that it has upsized its previously announced private offering of convertible senior notes to $300 million, from $250 million.

The sale of the convertible senior notes due 2027 is expected to close on or about October 12, with projected net proceeds of around $290 million.

Semtech has granted the initial purchasers an option to buy the notes of up to an additional $37.5 million, for a settlement within a 13-day period from the date when the notes first issued.

The semiconductor company expects to use around $27.8 million of the net proceeds from the offering to pay the cost of certain convertible note hedge transactions.

It also intends to use the remainder of the net proceeds of the offering, together with the borrowings under the term loan facility, revolving credit facility and available cash and cash equivalents, to finance the purchase price for Sierra Wireless, Inc.

The notes will be senior, unsecured obligations of Semtech, and will bear interest at a rate of 1.625% per year, payable semiannually.

The initial conversion rate for the notes is 26.8325 shares of Semtech per $1,000 principal amount of notes, which represents a premium of around 27.50 percent over the last reported sale price per Semtech's share on October 6.