St: places $1.5 billion worth of convertible bonds in two tranches

STMicroelectronics has announced the pricing of a $1.5 billion issue of senior unsecured bonds convertible into the group’s ordinary shares.

The issue comprises two tranches of $750 million each: one maturing in five years, in 2031, and one maturing in seven years, in 2033. The net proceeds from the issue will be used for general corporate purposes, including the early redemption of the $750 million zero-coupon convertible bonds maturing in 2027, as previously announced by the company.

The tranche maturing in 2031 does not provide for the payment of interest; it will be issued at 100 per cent of face value and redeemed at par on the maturity date of 23 June 2031, unless converted, repurchased or redeemed early. The tranche maturing in 2033, on the other hand, will pay an annual coupon of 0.625%, payable half-yearly in arrears, and will also be issued and redeemed at 100% of the nominal value.

ST has set the initial conversion price at $119.98 for the 2031 bonds and at $121.92 for the 2033 bonds, corresponding to premiums of 55% and 57.5% respectively over the reference share price.

Under the terms of the transaction, the company may satisfy conversion requests through a combination of cash and shares, or exclusively in cash or shares, at the group’s discretion.