Microchip Technology Announces Upsize and Pricing of Offering of $800 Million of Convertible Senior Notes

Core Viewpoint - Microchip Technology Incorporated has announced the pricing of $800 million in Convertible Senior Notes due 2030, increasing from a previously announced $600 million, with expected net proceeds of approximately $785.1 million after expenses [1][10]. Group 1: Offering Details - The offering is exclusively for qualified institutional buyers under Rule 144A of the Securities Act [1][11]. - The notes will not bear regular interest and will mature on February 15, 2030, with a redemption option starting February 20, 2029, under specific conditions [2][3]. - Holders can require Microchip to repurchase the notes for cash on February 15, 2029, or upon a fundamental change [3]. Group 2: Conversion Features - The initial conversion rate is set at 9.5993 shares of common stock per $1,000 principal amount, equating to a conversion price of approximately $104.17 per share, representing a 40% premium over the last reported price of $74.41 [4]. - Notes will be convertible under specified conditions until November 15, 2029, after which they can be converted at any time [5]. Group 3: Financial Transactions - Microchip has engaged J. Wood Capital Advisors LLC to purchase $25 million in common stock concurrently with the offering [6]. - The company has entered into capped call transactions to mitigate potential dilution from the notes, with an initial cap price of $148.82 per share [7][8]. - Approximately $60.5 million of the net proceeds will be allocated to cover the costs of the capped call transactions, with remaining proceeds aimed at repaying outstanding notes under the commercial paper program [10].