01—Abstract
Summary
Summary of the 8-K filed May 12, 2026. Cited figures are marked; the original filing is the authoritative source.
On May 11, 2026, ON Semiconductor Corporation completed a private unregistered offering of $1.5 billiona aggregate principal amount of 0% Convertible Senior Notes due 2031, including the full exercise of the initial purchasers' $200 million option.
The notes mature May 1, 2031, bear no regular interest, and are guaranteed by the company's U.S. subsidiaries that are borrowers or guarantors under its June 22, 2023 Credit Agreement. The company received net proceeds of approximately $1,472.9 millionb. It used about $331.9 million of those proceeds to repurchase approximately 3.1 million shares of common stock concurrently with pricing, and expects to use about $70.7 million (net of warrant proceeds) for the cost of the convertible note hedges, with the remainder for general corporate purposes, including repayment of outstanding indebtedness.
The initial conversion rate is 6.1997 shares per $1,000c principal amount, equivalent to an initial conversion price of approximately $161.30 per share, with a maximum of 14,181,600 shares issuable on conversion. The company may pay cash up to principal on conversion and settle the excess in cash, shares, or a combination at its election. The company may redeem the notes for cash on or after May 7, 2029, if the stock trades at or above 130% of the conversion price for specified periods.
Holders may require repurchase at par upon a fundamental change. In connection with pricing, the company entered into convertible note hedge transactions and sold warrants to counterparties.
The warrants have an initial strike price of $211.54d per share, a premium of 100.0% over the $105.77 closing price on May 6, 2026, with a maximum of 18,599,106 shares issuable. The warrants could be dilutive to earnings per share if the market value exceeds the strike price, and the company would owe shares to the counterparties at maturity based on that excess.
02—Key points
Key Highlights
- Completed a $1.5 billion offering of 0% Convertible Senior Notes due May 1, 2031, including the full $200 million option exercise
- Net proceeds of approximately $1,472.9 million after initial purchasers' discounts and offering expenses
- Used approximately $331.9 million of proceeds to repurchase about 3.1 million common shares concurrently with pricing
- Initial conversion price of approximately $161.30 per share (6.1997 shares per $1,000 principal); maximum 14,181,600 conversion shares
- Warrants sold with an initial strike price of $211.54, a 100.0% premium over the $105.77 closing price on May 6, 2026; maximum 18,599,106 shares
- Convertible note hedges entered into to reduce potential dilution and/or offset cash payments above principal upon conversion; cost of approximately $70.7 million after warrant proceeds offset
- Notes are guaranteed by U.S. subsidiaries that are borrowers or guarantors under the June 22, 2023 Credit Agreement; company may redeem for cash on or after May 7, 2029 subject to a stock price condition
03—Questions
Frequently Asked Questions
How much capital did ON Semiconductor raise and what will it be used for?
The company raised $1.5 billion in aggregate principal of 0% convertible notes and received net proceeds of approximately $1,472.9 million. It used about $331.9 million to repurchase roughly 3.1 million shares, expects to pay about $70.7 million for the convertible note hedges (after partial offset from warrant proceeds), and intends to use the remainder for general corporate purposes, including repaying outstanding indebtedness.
What are the key terms of the notes?
The notes mature May 1, 2031, carry no regular interest, and do not accrete principal. The initial conversion rate is 6.1997 shares per $1,000 principal (about $161.30 per share). On conversion, the company pays cash up to principal and may settle the excess in cash, shares, or both at its election. Holders may require repurchase at par upon a fundamental change.
Can ON Semiconductor redeem the notes early?
Yes, the company may redeem all or part of the notes for cash at 100% of principal, plus accrued special interest, on or after May 7, 2029, if the last reported sale price of common stock is at least 130% of the conversion price for at least 20 trading days in a 30 trading-day period ending shortly before the redemption notice. The notes have no sinking fund.
How could the warrants affect shareholders?
The warrants cover the same number of shares as the hedges, up to 18,599,106 shares, at a strike price of $211.54. If the market value exceeds the strike, the warrants would have a dilutive effect on earnings per share, and at maturity the company would owe shares to the counterparties based on the excess of market price over the strike.
Do noteholders have rights under the convertible note hedges or warrants?
No. The convertible note hedges and warrants are separate transactions between the company and the counterparties, not part of the notes' terms, and holders of the notes have no rights with respect to them.
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