Semtech Prices Private Placement Of $250 Mln Of Senior Notes; Backs Q3 Outlook In Line With View

(RTTNews) - Semtech Corporation (SMTC), a semiconductor, IoT systems, and cloud connectivity service provider, said on Friday that it has priced $250 million of its 4 percent convertible senior notes due 2028.

The net proceeds from the transaction, expected to be closed on or about October 26, 2023, are projected at $242.5 million. Semtech intends to use the proceeds to pay down debts.

The notes will bear interest at a rate of 4 percent per annum, payable semiannually in arrears on May 1 and November 1 of each year, beginning on May 1, 2024. The Notes will mature on November 1, 2028.

The initial conversion rate for the notes is 49.0810 shares of Semtech's common stock per $1,000 principal amount of notes. This is equivalent to an initial conversion price of around $20.37 per share, which represents a premium of approximately 27.5 percent over the last reported per SMTC share price as of October 19, 2023.

In addition, the company has reaffirmed its outlook for the third-quarter of 2024.

For the third-quarter, Semtech still expects to post adjusted loss per share of $0.22 to $0.09.

On average, 12 analysts polled by Thomson Reuters expect the firm to post loss per share of $0.13, for the quarter. Analysts' estimates typically exclude special items.

For the three-month period, the company continues to project sales of $190 million to $210 million, in line with analysts' average estimate of $204.49 million.