Microchip Technology Announces Pricing of Senior Secured Notes and Senior Notes

CHANDLER, Arizona, May 27, 2020 (GLOBE NEWSWIRE) -- Microchip Technology Incorporated (NASDAQ: MCHP) (“Microchip,” “we” or “our”) announced today the pricing of $1.0 billion in aggregate principal amount of senior secured notes due September 1, 2023 (the “Senior Secured Notes”) and $1.2 billion in aggregate principal amount of senior notes due September 1, 2025 (the “Senior Notes” and, together with the Senior Secured Notes, the “Notes”).  The Senior Secured Notes will bear interest at an annual rate of 2.670 percent and the Senior Notes will bear interest at annual rate of 4.250 percent.  The offering of the Notes is expected to close on May 29, 2020, subject to customary closing conditions.

Microchip intends to use approximately $615 million of the net proceeds from the offering of the Senior Secured Notes to repay in full all amounts outstanding under its senior secured bridge loan facility and to use the remaining net proceeds, together with a portion of the net proceeds from the offering of Senior Notes, to finance the cash portion of the consideration it will deliver in connection with exchanges of approximately $383.3 million in aggregate principal amount of its outstanding 1.625% Convertible Senior Subordinated Notes due 2025 (the “2025 Notes”) and approximately $643.9 million in aggregate principal amount of its outstanding 1.625% Convertible Senior Subordinated Notes due 2027 (the “2027 Notes”), for approximately $1.03 billion in cash in the aggregate, representing, the principal amount of such 2025 Notes and 2027 Notes exchanged and accrued and unpaid interest thereon, and shares of Microchip’s common stock, representing the conversion value in excess of the principal amount of such notes, in privately negotiated transactions with certain holders of such 2025 Notes and 2027 Notes. Any remaining net proceeds from the offering of the Notes will be used for general corporate purposes, which may include the repayment of a portion of the amounts outstanding under Microchip’s revolving credit facility.

The Notes will be guaranteed on a joint and several basis by certain of Microchip’s subsidiaries that guarantee obligations under Microchip’s term loan facility and revolving credit facility (collectively, our “senior credit

facilities”) as well as our outstanding 3.922% Senior Secured Notes due 2021 and 4.333% Senior Secured Notes due 2023 (collectively, the “existing secured notes”).  The Senior Secured Notes and the related guarantees will be secured on a pari passu first lien basis with our senior credit facilities and our existing secured notes by the collateral that secures such obligations.  The Senior Notes and the related guarantees will not be secured by any assets or properties of Microchip or the guarantors.