8-K

NXP Semiconductors N.V. 8-K Report (May 7, 2013)

Filed May 7, 2013For Securities:NXPI

Summary

NXP Semiconductors N.V. (NXPI) announced on May 6, 2013, the upsized pricing of its senior unsecured notes offering. The offering was increased from USD 500 million to USD 750 million in aggregate principal amount, with the notes due to mature in 2018. The interest rate on these notes is fixed at 3.75% per annum, payable semi-annually. The primary use of the net proceeds from this offering is to repay outstanding amounts under its USD-denominated floating rate senior secured notes due 2016. This move aims to reduce the company's variable rate debt. Additionally, the proceeds will be used for general corporate purposes, including the potential repurchase or repayment of other existing long-term secured indebtedness. The closing of the offering is anticipated around May 20, 2013.

Key Highlights

  • 1Upsized Senior Unsecured Notes Offering: NXP increased the offering size from USD 500 million to USD 750 million.
  • 2Maturity and Interest Rate: The new senior unsecured notes will mature on June 1, 2018, carrying a fixed annual interest rate of 3.75%.
  • 3Debt Refinancing Strategy: Proceeds will be used to repay USD 500 million of existing senior secured notes due 2016.
  • 4Reduction of Variable Rate Debt: The offering is intended to decrease NXP's exposure to floating interest rates.
  • 5General Corporate Purposes: Remaining proceeds may be used for other general corporate activities, including further debt repayment.
  • 6Closing Expected Around May 20, 2013: The transaction is scheduled to conclude in late May 2013.
  • 7Subordinated Debt Structure: The unsecured notes are structurally subordinated to liabilities of non-guaranteeing subsidiaries and effectively subordinated to secured debt.

Frequently Asked Questions

The primary purpose is to refinance NXP's existing USD-denominated floating rate senior secured notes due 2016, thereby reducing the company's variable rate debt. Proceeds will also be used for general corporate purposes, including potential repayment of other secured indebtedness.

The notes have an aggregate principal amount of USD 750 million, mature on June 1, 2018, and bear a fixed annual interest rate of 3.75%. Interest payments will be made semi-annually.

This offering aims to reduce NXP's exposure to variable interest rates by replacing floating rate secured debt with fixed rate unsecured debt. It also provides flexibility for managing other long-term secured indebtedness.

No, these are senior unsecured notes. This means they are structurally subordinated to the liabilities of NXP's subsidiaries that have not guaranteed the notes, and effectively subordinated to any secured debt of the issuers and guarantors, to the extent of the value of the assets securing such debt.