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Texas Instruments prices $3.0 billion of investment grade notes

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Texas Instruments Incorporated (TI) announced the pricing of five series of senior unsecured notes for an aggregate principal amount of $3.0 billion. The company expects to use the net proceeds for general corporate purposes. BofA Securities, Inc.; Citigroup Global Markets Inc.; and Mizuho Securities USA LLC are serving as joint book-running managers for the offering.
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A recent announcement by Texas Instruments Incorporated (TI) regarding a $3.0 billion senior unsecured notes offering is a significant event for the company and its investors. The decision to issue debt can be driven by various strategic reasons such as financing capital expenditures, refinancing existing debt, or for other general corporate purposes. It is important to assess the interest rates offered in comparison to current market conditions and TI's existing debt profile.

The offered rates ranging from 4.600% to 5.150% reflect the current cost of borrowing for a corporation with TI's creditworthiness. Given the Federal Reserve's interest rate trends and inflationary pressures, these rates seem to be aligned with broader market expectations. The staggered maturities from 2027 to 2063 provide TI with a diversified maturity schedule, potentially reducing refinancing risks and allowing for a more strategic capital structure.

Investors should note that the additional issuance of 5.050% notes due 2063 suggests a favorable reception to TI's previous offerings, indicating investor confidence in the company's long-term financial health. However, the impact on TI's leverage ratios and interest coverage metrics will need to be closely monitored as they could affect the company's financial flexibility and credit ratings.

The move by Texas Instruments to issue $3.0 billion in senior unsecured notes can have implications for its position in the semiconductor industry. The industry is capital-intensive, with a constant need for investment in research and development and advanced manufacturing capabilities. TI's decision to secure additional funding could signal its intent to invest in these areas to maintain or enhance its competitive edge.

Furthermore, the role of TI's product portfolio and market demand should be considered. As a major player in the semiconductor space, TI's financial strategies could be indicative of broader industry trends, such as preparing for cyclical upturns or investing in emerging technologies like the Internet of Things (IoT) and automotive electronics. The ability to raise substantial capital also demonstrates the market's trust in TI's business model and future prospects.

It is also worth noting the role of the joint book-running managers, such as BofA Securities, Citigroup Global Markets Inc. and Mizuho Securities USA LLC. Their involvement suggests a robust process for the offering, potentially increasing investor confidence in the transaction's execution and TI's governance practices.

In the context of TI's senior unsecured notes offering, it is crucial to understand the legal implications of such financial instruments. Senior unsecured notes are typically not backed by specific collateral, ranking below secured debt in the event of liquidation but above subordinated debt. This positioning impacts the risk assessment for potential investors and the company's cost of capital.

The announcement specifies that the offering is made only by means of a prospectus and a related prospectus supplement, which are critical documents providing detailed information about the terms of the notes, the company's financial condition and risks involved. Investors rely on the accuracy and completeness of these documents, which are regulated by the Securities and Exchange Commission (SEC) to ensure transparency and protect investor interests.

TI's statement that the sale will not occur in jurisdictions where it is not permitted highlights the complex regulatory landscape that multinational corporations must navigate when issuing debt. Compliance with both federal and state securities laws is essential to avoid legal repercussions and maintain corporate reputation.

DALLAS, Feb. 5, 2024 /PRNewswire/ -- Texas Instruments Incorporated (TI) (Nasdaq: TXN) today announced the pricing of five series of senior unsecured notes for an aggregate principal amount of $3.0 billion. The notes consist of the following:

  • $650 million of 4.600% senior unsecured notes due February 8, 2027;
  • $650 million of 4.600% senior unsecured notes due February 8, 2029;
  • $600 million of 4.850% senior unsecured notes due February 8, 2034;
  • $750 million of 5.150% senior unsecured notes due February 8, 2054; and
  • $350 million of 5.050% senior unsecured notes due May 18, 2063.

The 5.050% notes due 2063 will be a further issuance of, and form a single series with, the $1.2 billion aggregate principal amount of the existing 5.050% notes due 2063 issued by TI on May 18, 2023. Each of the 4.600% notes due 2027, the 4.600% notes due 2029, the 4.850% notes due 2034 and the 5.150% notes due 2054 will be a new issuance.

TI expects to use the net proceeds of this offering for general corporate purposes. The offering is expected to close on February 8, 2024.

BofA Securities, Inc.; Citigroup Global Markets Inc.; and Mizuho Securities USA LLC are serving as joint book-running managers for the offering.

The offering of the notes is made only by means of a prospectus and a related prospectus supplement, copies of which may be obtained for free by visiting EDGAR on the Securities and Exchange Commission website at www.sec.gov or, in the alternative, from BofA Securities, Inc., Attention: Prospectus Department, NC1-022-02-25, 201 North Tryon Street, Charlotte, North Carolina 28255, by phone: (800) 294-1322; Citigroup Global Markets Inc., c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York 11717, by phone: (800) 831-9146; or Mizuho Securities USA LLC, Attention: Debt Capital Markets, 1271 Avenue of the Americas, New York, New York 10020, by phone: (866) 271-7403.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the notes or any other securities, nor will there be any sale of the notes or any other securities in any state or jurisdiction in which such an offer, solicitation or sale is not permitted.

About Texas Instruments

Texas Instruments Incorporated (Nasdaq: TXN) is a global semiconductor company that designs, manufactures, tests and sells analog and embedded processing chips for markets such as industrial, automotive, personal electronics, communications equipment and enterprise systems. Our passion to create a better world by making electronics more affordable through semiconductors is alive today, as each generation of innovation builds upon the last to make our technology smaller, more efficient, more reliable and more affordable – making it possible for semiconductors to go into electronics everywhere. We think of this as Engineering Progress. It's what we do and have been doing for decades.

TXN-G

Texas Instruments Logo. (PRNewsFoto/Texas Instruments Incorporated) (PRNewsfoto/Texas Instruments Incorporated)

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SOURCE Texas Instruments Incorporated

FAQ

What is the aggregate principal amount of the senior unsecured notes announced by Texas Instruments Incorporated (TI)?

Texas Instruments Incorporated (TI) announced the pricing of five series of senior unsecured notes for an aggregate principal amount of $3.0 billion.

What is the expected use of the net proceeds from the offering?

TI expects to use the net proceeds of this offering for general corporate purposes.

Who are the joint book-running managers for the offering?

BofA Securities, Inc.; Citigroup Global Markets Inc.; and Mizuho Securities USA LLC are serving as joint book-running managers for the offering.

Where can copies of the prospectus and related prospectus supplement be obtained?

Copies of the prospectus and related prospectus supplement may be obtained for free by visiting EDGAR on the Securities and Exchange Commission website at www.sec.gov or from BofA Securities, Inc., Citigroup Global Markets Inc., or Mizuho Securities USA LLC.

Does the news release constitute an offer to sell or a solicitation of an offer to buy any of the notes or any other securities?

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the notes or any other securities.

Texas Instruments Incorporated

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About TXN

Texas Instruments Incorporated is an American technology company headquartered in Dallas, Texas, that designs and manufactures semiconductors and various integrated circuits, which it sells to electronics designers and manufacturers globally.