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Get filing alertsON Semiconductor prices $1.3B convertible notes at 52.5% premium, plans $332M buyback
Filed May 7, 2026 · Period ending May 6, 2026 · ~1 min read
Key Changes
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high
Priced $1.3 billion of 0% convertible senior notes due 2031 at $161.30/share conversion price (52.5% premium to $105.77 close); notes are senior unsecured obligations guaranteed by certain subsidiaries.
Item 8.01 — Other Events verify on EDGAR → -
high
Will use ~$327.9M of net proceeds to repurchase ~3.1 million shares concurrently with the offering; remainder for debt repayment and general corporate purposes after $61 million hedge cost.
Exhibit 99.1 view on EDGAR → -
medium
Entered convertible note hedges to reduce dilution from conversions and sold warrants at $211.54 strike (100% premium); structure caps dilution between $161.30 and $211.54 per share.
Exhibit 99.1 view on EDGAR → -
medium
Can redeem notes starting May 2029 if stock trades at ≥130% of conversion price ($209.69 initially) for 20 of 30 trading days; will pay cash for principal amount on conversion, with choice of cash/stock for excess.
Exhibit 99.1 view on EDGAR →
Summary
ON Semiconductor raised $1.3 billion through zero-coupon convertible notes maturing in 2031, priced at a 52.5% premium to the May 6 stock close of $105.77. The notes convert at $161.30 per share and carry no interest, making this a low-cost financing vehicle that defers potential dilution until the stock appreciates substantially.
The company structured hedges to offset dilution from conversions and sold warrants at a $211.54 strike, effectively capping dilution risk between the conversion price and the warrant strike. The immediate use of proceeds matters for current shareholders: $332 million will fund a concurrent buyback of approximately 3.1 million shares, providing near-term capital return.
The remainder will pay down existing debt and cover general corporate needs. The combination of zero-coupon debt, a high conversion premium, and a concurrent buyback suggests management views the current stock price as attractive while securing long-term capital at minimal cost. The redemption feature starting in 2029 gives the company flexibility to retire the notes if the stock performs well, though holders can force repurchase at par if a fundamental change occurs.
Section-by-Section Diff
Event · Exhibit 99.1
Added in current filing · view on EDGAR →
The initial conversion rate is 6.1997 shares of common stock per $1,000 principal amount of notes, which is equivalent to an initial conversion price of approximately $161.30 per share, representing a premium of approximately 52.5% over the closing price of the common stock of $105.77 per share on May 6, 2026. onsemi will satisfy any conversion elections by paying cash up to the aggregate principal amount of the notes to be converted, and paying or delivering, as the case may be, cash, shares of common stock or a combination of cash and shares of common stock, at onsemi’s election, in respect of the remainder, if any, of its conversion obligation in excess of the aggregate principal amount of the notes to be converted.
Notes convert at 6.1997 shares per $1,000 principal ($161.30 per share). onsemi will pay cash for the principal amount upon conversion and can choose cash, stock, or a combination for any conversion value above principal. This structure limits dilution by requiring cash settlement of the principal portion.
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Figures/quotes linked to EDGAR · Narrative written by AI · Jul 3, 2026 · How we verify