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ON Semi's financing actions in Q4 saves them $7M

Posted: 26 Dec 2005 ?? ?Print Version ?Bookmark and Share

Keywords:ON Semiconductor? Semiconductor Components Industries?

ON Semiconductor Corp. announced that it has repaid the remaining $94.5 million of principal and accrued interest owed under its 10 percent junior subordinated note due 2011 previously issued by the company's subsidiary, Semiconductor Components Industries LLC. The repayment of the note was financed with proceeds from the company's previously announced private offering of 1.875 percent convertible senior subordinated notes due 2025 and cash on hand.

With the completion of this transaction, said the press release, the company has eliminated all significant double-digit interest expense debt. This transaction is expected to have a minimal financial impact to the company's Q4 2005 net interest expense, but is expected to save the company approximately $7 million of net interest expense in 2006. Based on the repayment of the 10 percent junior subordinated note, previously announced financial transactions completed in Q4 2005, current LIBOR rates, and assuming no further changes to the amount of total debt, the company currently expects to reduce its annual 2006 net interest expense to approximately $49 million.

"The financing actions taken by the company during Q4 2005 have helped extend the overall maturity of our debt and reduce its associated costs. The average interest rate associated with our total debt is expected to be approximately 5 percent in 2006. This is substantially lower than in 2003 and 2004 when the average interest rate on our total debt was approximately 11 and 9 percent, respectively," said Donald Colvin, ON Semi SVP and CFO.

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