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Date: 10-09-13

Term loan facility to Freescale rised to $800M from $300M

Freescale Semiconductor said it has been advised by the arrangers under its proposed new senior secured term loan facility that they have received sufficient orders to upsize the proposed new term loan facility to $800 million from the original $300 million proposed at the outset of the offering. The proceeds from the proposed new term loan facility are intended to be used to redeem, repurchase or otherwise acquire all of Freescale’s outstanding 10⅛% senior secured notes due 2018 and a portion of its 9¼% senior secured notes due 2018, and to pay related redemption premiums and fees. Freescale will pay for a portion of its expenses with cash on hand. The foregoing does not constitute a notice of redemption for any outstanding notes. The purposes of the transaction and the application of the proceeds are to extend a portion of Freescale’s debt maturities and reduce interest expense.

The proposed new term loan facility is expected to mature in January 2021. The maturity may be accelerated to March 2018 under specified circumstances. The new term loan is expected to bear interest at a rate equal to LIBOR plus 3.75% (with LIBOR of not less than 1.25%). The closing of the proposed new term loan facility, which is expected to occur on September 11, 2013, is subject to customary conditions, and there can be no assurance that Freescale will be successful in obtaining the proposed new term loan facility on reasonably acceptable terms, or at all.

The proposed new term loan facility will be effected as an amendment to the existing senior secured credit facilities. The secured credit facilities contain a provision that requires the weighted average yield of existing term loans under the facilities to be no less than 0.5% below the weighted average yield of certain new term loans issued under the facilities. Consequently, as of the closing of the new term loan facility, the existing $349 million term loan facility due 2016 is expected to bear interest at a rate of 4.8%, an increase of 0.5%. The company expects cash interest savings related to this transaction to be approximately $26 million on an annualized basis.

Source: Freescale Semiconductor

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