ON Semiconductor Corporation has entered into an amended and restated senior revolving credit facility with a group of lenders. An SEC 8-K filing notes JPMorgan Chase is the adminstrative agent. Lenders include Bank of America, The Royal Bank of Scotland plc, and Sumitomo Mitsui Banking Corporation, as co-syndication agents, and Morgan Stanley MUFG Loan Partners, LLC, Barclays Bank plc and Fifth Third Bank, as co-documentation agents. The amended and restated facility, which amends the Company's facility entered into in December of 2011, now enables the company to borrow up to $800 million under revolving loans.
The new facility has a five year term that expires in October of 2018. Fees and interest expense under the revolving credit facility can vary based on the company's total leverage ratio.The facility is expected to bear interest at LIBOR or base rate plus an applicable rate that varies based on leverage ratio of the company. If the facility is undrawn, there is a yearly commitment fee of 35 basis points, which can vary as well based on the total leverage ratio.
Following entry into the Credit Agreement, the Company is borrowing $120 million of the $800 million available under the new Facility, with funding anticipated to occur on or around October 14, 2013. The Company has not identified any specific use of the drawn proceeds and as such intends to use these funds for general corporate purposes.
Under the revolving credit facility, the company is required to maintain a maximum total leverage ratio of less than 3.75 to 1.00 and a minimum interest coverage ratio of 3.50 to 1.00. The company can utilize the borrowings under the facility for areas such as general corporate purposes, working capital, stock repurchases, and acquisitions. Further information on the revolving credit facility will be contained in a Form 8-K filed by the company separately.
"We are pleased to have increased our revolving credit facility to $800 million on attractive terms," said Bernard Gutmann, ON Semiconductor executive vice president and CFO. "The facility enhances the credit profile of the company and provides ON Semiconductor with considerable flexibility to support our longer term business and financial objectives."
ON Semiconductor offers a comprehensive portfolio of energy efficient power and signal management, logic, discrete and custom solutions to help customers solve their unique design challenges in automotive, communications, computing, consumer, industrial, LED lighting, medical, military/aerospace and power supply applications. ON Semiconductor operates a responsive, reliable, world-class supply chain and quality program, and a network of manufacturing facilities, sales offices and design centers in key markets throughout North America, Europe, and the Asia Pacific regions.