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Get filing alertsON Semiconductor launches $1.3B convertible notes offering to fund stock buyback and debt repayment
Filed May 6, 2026 · Period ending May 6, 2026 · ~1 min read
Key Changes
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onsemi is offering $1.3 billion of convertible senior notes due 2031 in a private placement to qualified institutional buyers, with initial purchasers holding a 13-day option for an additional up to $200 million.
Item 8.01 — Other Events verify on EDGAR → -
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Proceeds will fund convertible note hedge transactions, repurchase up to $400 million of common stock concurrently with pricing, and repay outstanding debt. The concurrent buyback could increase the effective conversion price.
Exhibit 99.1 view on EDGAR → -
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Upon conversion, onsemi will pay cash up to principal amount and can elect cash, shares, or a combination for any excess conversion value, giving the company flexibility in managing dilution.
Exhibit 99.1 view on EDGAR → -
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Hedge counterparties will purchase shares and enter derivatives concurrently with pricing to establish hedges, which could increase the stock price or reduce declines. Ongoing hedge adjustments through 2031 could cause volatility.
Exhibit 99.1 view on EDGAR →
Summary
ON Semiconductor announced a $1.3 billion convertible senior notes offering due 2031, structured as a private placement to institutional buyers. The company plans to use proceeds strategically: funding convertible note hedge transactions to reduce dilution, executing a concurrent up to $400 million stock repurchase that could raise the effective conversion price, and repaying existing debt.
The notes will be senior unsecured obligations with semiannual interest payments and May 2031 maturity.
The offering includes standard convertible debt mechanics designed to manage dilution. onsemi will enter into note hedge agreements covering the shares underlying the notes, reducing potential equity dilution upon conversion, while simultaneously selling warrants that could be dilutive if the stock price rises significantly. Upon conversion, the company retains flexibility to settle in cash, shares, or a combination. Hedge counterparties will purchase shares and establish derivative positions around pricing, which could provide near-term price support but may introduce volatility through 2031 as hedges are adjusted. The concurrent up to $400 million buyback represents a material capital allocation decision alongside the debt raise.
Section-by-Section Diff
Event · Exhibit 99.1
Added in current filing · view on EDGAR →
In connection with the pricing of the notes, onsemi expects to enter into privately negotiated convertible note hedge agreements with certain of the initial purchasers of the notes or their respective affiliates and/or certain other financial institutions (the “hedge counterparties”). The convertible note hedge transactions will cover, subject to customary anti-dilution adjustments, the number of shares of common stock that initially underlie the notes, and are expected to reduce the potential dilution to the common stock and/or offset potential cash payments in excess of the principal amount upon conversion of the notes.
onsemi also expects to enter into warrant transactions with the hedge counterparties relating to the same number of shares of common stock, subject to customary anti-dilution adjustments.
onsemi will enter into convertible note hedge agreements covering the shares underlying the notes to reduce dilution and offset cash payments upon conversion. Simultaneously, warrant transactions will be executed with hedge counterparties. The warrants could have a dilutive effect if the stock price exceeds the warrant strike price at expiration.
Event · Item 8.01 — Other Events
Item 8.01 — Other Events filed; see Key Changes for terms.
Added in current filing · verify on EDGAR →
ON Semiconductor Corporation issued a press release announcing the commencement of an offering of $1.3 billion aggregate principal amount of its Convertible Senior Notes due 2031 in a private transaction that is exempt from the registration requirements of the Securities Act of 1933, as amended.
ON Semiconductor is raising $1.3 billion through convertible senior notes maturing in 2031 via a private placement. Convertible notes allow holders to convert debt into equity under specified conditions, typically at a premium to the current stock price. The filing does not disclose the conversion terms, interest rate, or intended use of proceeds.
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Figures/quotes linked to EDGAR · Narrative written by AI · Jul 1, 2026 · How we verify