MKS Instruments(US:MKSI) Newsfilterยท2024-05-16 20:15Core Viewpoint - MKS Instruments, Inc. has successfully closed an offering of $1.4 billion in convertible senior notes, with net proceeds of approximately $1,374.2 million intended for debt repayment and general corporate purposes [1][2]. Group 1: Offering Details - The offering consisted of $1.4 billion aggregate principal amount of 1.25% convertible senior notes due 2030, with net proceeds after discounts and expenses being approximately $1,374.2 million [1]. - MKS utilized about $167.4 million of the net proceeds to cover costs associated with capped call transactions, while the remaining $1,206.0 million will be used to repay borrowings under its First Lien USD tranche B term loan [2]. - The notes are unsecured, bearing an interest rate of 1.25% per annum, with semi-annual payments starting December 1, 2024, and maturing on June 1, 2030 [3]. Group 2: Conversion and Redemption Terms - The initial conversion rate for the notes is set at 6.4799 shares of MKS common stock per $1,000 principal amount, equating to a conversion price of approximately $154.32 per share, representing a 30% premium over the last reported sale price of $118.71 [4]. - Noteholders can convert their notes under specific conditions prior to March 1, 2030, and thereafter at any time until two trading days before maturity [5]. - In the event of a fundamental change, holders may require MKS to repurchase their notes at a price equal to 100% of the principal amount plus any accrued interest [6]. Group 3: Capped Call Transactions - MKS has entered into capped call transactions to mitigate potential dilution of its common stock upon conversion of the notes, with an initial cap price of $237.42 per share, a 100% premium over the last reported sale price [7]. - The option counterparties are expected to engage in derivative transactions and purchase shares of MKS common stock, which may influence the market price of the stock and the notes [8][9].