Summary
Microchip Technology Incorporated (MCHP) announced on February 16, 2022, that it has entered into privately negotiated exchange agreements to repurchase a portion of its outstanding 1.625% Convertible Senior Subordinated Notes due 2027. In these transactions, the company will issue approximately 1.1 million shares of its common stock and pay approximately $64.9 million in cash in exchange for about $64.9 million in principal amount of these notes. This move is not expected to generate cash proceeds for Microchip but rather to reduce its outstanding debt and outstanding convertible notes.
Key Highlights
- 1Microchip is conducting a debt exchange, offering common stock and cash to repurchase its 2027 Convertible Senior Subordinated Notes.
- 2Approximately $64.9 million in principal of the 2027 Notes will be retired.
- 3The company will issue an estimated 1.1 million shares of its common stock as part of the exchange.
- 4An estimated $64.9 million in cash will be used to fund the exchange.
- 5The cash portion of the exchange will be funded through borrowings under its existing credit agreement and cash on hand.
- 6The transactions are being conducted as a private placement under Section 4(a)(2) of the Securities Act, exempting the shares from registration.
- 7Approximately $128.1 million of the 2027 Notes will remain outstanding after the exchange.