Semtech slips after $350 mln 0% convertible bonds sale
08/10/2025 15:50
** Semiconductor supplier Semtech's SMTC.O shares down 2.3% at $69.30 early Weds after co secured capital raise to refinance debt
** Camarillo, California-based SMTC early Weds announced pricing private
offering of $350 mln 0% convertible bonds (CBs) due 2030
** Initial conversion price set at $101.05, which is 42.5% premium to stock's last close
** SMTC shares on Tues bounced 4% to $70.91 after co unveiled the offering after the bell Mon
** Co expects to use approx $221 mln of net proceeds, together with issuance of about 3 mln common shares, for the exchange of about $219 mln of its 1.625% CBs due 2027
** It expects to use approx $63 mln, along with issuance of about 2.2 mln shares, for the exchange of about $62 mln of its 4% CBs due 2028, and about $56.5 mln to repay term loan
** It also intends to use about $27 mln to pay cost of capped calls; cap price of $141.82 is double the stock's last sale on Tues
** Including the decline on Weds, SMTC shares up ~12% YTD compared to ~19% rise in the Nasdaq .IXIC
** 14 of 16 analysts rate the stock "strong buy" or "buy" and 2 have "hold"; median PT is $67.50, per LSEG data
(Lance Tupper is a Reuters market analyst. The views expressed are his own)
((lance.tupper@tr.com 1-646-279-6380))