01—Abstract
Summary
Summary of the 8-K filed May 7, 2026. Cited figures are marked; the original filing is the authoritative source.
On May 6, 2026, ON Semiconductor Corporation (Nasdaq: ON), which describes itself in the press release as onsemi, priced a private offering of $1.3 billiona aggregate principal amount of 0% Convertible Senior Notes due 2031.
The notes are senior unsecured obligations guaranteed by certain subsidiaries, carry no regular interest, and mature on May 1, 2031 unless earlier repurchased, redeemed or converted. The initial purchasers have a 13-day option to buy up to an additional $200.0 millionb of notes. The offering is expected to close on May 11, 2026, and is being sold only to qualified institutional buyers under Rule 144A.
The company expects net proceeds of approximately $1,276.4 millionc ($1,472.9 million if the option is exercised in full). It plans to use about $61.2 million to pay for convertible note hedge transactions, net of proceeds from the warrant transactions, and about $331.9 million to repurchase approximately 3.1 million shares of its common stock concurrently with pricing. The remainder is intended for general corporate purposes, including repayment of outstanding indebtedness.
The initial conversion rate is 6.1997 shares per $1,000d principal amount, equal to a conversion price of about $161.30, a premium of approximately 52.5% over the $105.77 closing price on May 6, 2026. For investors, the key considerations are potential dilution and hedging activity. The company has entered convertible note hedges intended to reduce dilution and offset cash payments above principal, but warrant transactions with a strike of $211.54 per share could dilute shareholders if the stock price exceeds that level.
Conversions will be settled in cash up to principal, with the company electing cash, shares or a combination for any excess. The company may redeem the notes for cash on or after May 7, 2029 if its stock trades at least 130% of the conversion price for specified trading-day periods.
Holders may require repurchase at par upon a fundamental change. The filing references risk factors in the 2025 Form 10-K filed February 9, 2026.
02—Key points
Key Highlights
- Priced $1.3 billion of 0% Convertible Senior Notes due May 1, 2031 in a Rule 144A private offering, with a 13-day option for up to an additional $200.0 million.
- Expected net proceeds of approximately $1,276.4 million, or $1,472.9 million if the option is fully exercised.
- Plans to use about $331.9 million to repurchase roughly 3.1 million common shares concurrently with pricing, and about $61.2 million (net of warrant proceeds) for convertible note hedges.
- Initial conversion price of approximately $161.30 per share (6.1997 shares per $1,000 principal), a premium of about 52.5% over the $105.77 closing price on May 6, 2026.
- Warrant transactions have an initial strike of $211.54 per share, a 100.0% premium over the closing price, creating potential future dilution above that level.
- Conversions to be settled with cash up to principal, with the company electing cash, shares or a combination for any excess; the company may redeem for cash on or after May 7, 2029 if the stock trades at or above 130% of the conversion price under specified conditions.
- Offering expected to close on May 11, 2026, subject to customary closing conditions.
03—Questions
Frequently Asked Questions
How much capital is ON Semiconductor raising and when is the offering expected to close?
The company priced $1.3 billion aggregate principal amount of 0% Convertible Senior Notes due 2031 on May 6, 2026, with the offering expected to close on May 11, 2026, subject to customary closing conditions. The initial purchasers also hold an option to buy up to an additional $200.0 million within 13 days of the notes' first issuance.
What will the company do with the net proceeds?
The company expects net proceeds of approximately $1,276.4 million. It intends to use about $61.2 million to pay the cost of convertible note hedge transactions (after partial offset from warrant proceeds), about $331.9 million to repurchase approximately 3.1 million common shares concurrently with pricing, and the remainder for general corporate purposes, including repaying outstanding indebtedness.
Could the convertible notes dilute existing shareholders?
The convertible note hedges are expected to reduce potential dilution and/or offset cash payments above principal on conversion. However, the warrant transactions, with an initial strike of $211.54 per share, could be dilutive to the extent the market price exceeds the strike on the applicable expiration dates. The company may settle conversions in cash, shares or a combination for amounts above principal.
What are the key terms of the notes?
The notes are senior unsecured obligations, guaranteed by certain subsidiaries, bear no regular interest, and have a principal amount that does not accrete. Special interest, if any, is payable semiannually on May 1 and November 1 beginning November 1, 2026. The notes mature on May 1, 2031, unless earlier repurchased, redeemed or converted. No sinking fund is provided.
When can the company redeem the notes and what happens on a fundamental change?
The company may redeem all or part of the notes for cash at 100% of principal plus accrued and unpaid special interest, on or after May 7, 2029, if the last reported sale price of its common stock has been at least 130% of the conversion price for at least 20 trading days during a 30 consecutive trading-day period. Upon a fundamental change, as defined in the indenture, holders may require repurchase for cash at 100% of principal plus accrued and unpaid special interest.
04—Continue