$1.3B 0% notes: onsemi (Nasdaq: ON) sets 52.5% conversion premium
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
ON Semiconductor Corporation (onsemi) is raising capital through a private offering of convertible debt. The company priced $1.3 billion aggregate principal amount of 0% Convertible Senior Notes due 2031, with an initial conversion price of approximately $161.30 per share, a 52.5% premium to the $105.77 stock price on May 6, 2026.
onsemi expects net proceeds of about $1,276.4 million (or $1,472.9 million if the option for additional notes is fully exercised). It plans to spend roughly $331.9 million repurchasing about 3.1 million shares and about $61.2 million on convertible note hedge transactions, using the remaining funds for general corporate purposes including debt repayment.
The notes are senior unsecured, guaranteed by certain subsidiaries, and may be redeemed by onsemi after May 7, 2029 if share-price conditions are met. Concurrent hedge and warrant transactions are designed to limit dilution up to the hedge level, with warrants potentially dilutive above an initial strike price of $211.54 per share.
Positive
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Insights
onsemi raises zero‑coupon convertible debt with hedges and buybacks, balancing dilution and leverage.
onsemi is issuing $1.3 billion of 0% Convertible Senior Notes due 2031, with an option for an extra $200 million. The notes carry no regular interest, so the company adds leverage without ongoing coupon expense, and the conversion premium of about 52.5% places equity dilution well above the current share price.
The company expects net proceeds of about $1,276.4 million, using roughly $331.9 million to repurchase about 3.1 million shares and about $61.2 million for convertible note hedge transactions, with the balance for general corporate purposes, including debt repayment. This mix partially offsets dilution and can refinance higher-cost liabilities.
Convertible note hedge and warrant transactions with a warrant strike around $211.54 per share aim to reduce dilution up to the hedge strike, while allowing dilution only at substantially higher prices. Overall impact on shareholders will depend on future share performance, whether the $200 million option is exercised, and how much of the notes ultimately convert before May 1, 2031.
8-K Event Classification
2 items: 8.01, 9.01
2 items
Item 8.01
Other Events
Other
Voluntary disclosure of events the company deems important to shareholders but not covered by other items.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Convertible notes size: $1.3 billion aggregate principal
Net proceeds base: $1,276.4 million
Net proceeds with option: $1,472.9 million
+5 more
8 metrics
Convertible notes size
$1.3 billion aggregate principal
0% Convertible Senior Notes due 2031
Net proceeds base
$1,276.4 million
Expected net proceeds from initial notes offering
Net proceeds with option
$1,472.9 million
If $200.0 million option for additional notes is fully exercised
Conversion price
$161.30 per share
Initial conversion price, 52.5% above $105.77 stock price
Conversion rate
6.1997 shares per $1,000
Initial conversion rate of common stock into notes
Share repurchase amount
$331.9 million for ~3.1 million shares
Concurrent repurchases of onsemi common stock
Hedge cost
$61.2 million
Approximate cost of convertible note hedge transactions
Warrant strike price
$211.54 per share
Initial strike price of warrant transactions, 100% above $105.77
Key Terms
0% Convertible Senior Notes, Rule 144A, convertible note hedge transactions, warrant transactions, +2 more
6 terms
0% Convertible Senior Notes financial
"pricing of its private offering of $1.3 billion aggregate principal amount of 0% Convertible Senior Notes due 2031"
0% convertible senior notes are a type of loan a company borrows that doesn't pay interest upfront. Instead, the company promises to pay back the amount later, and these notes can be turned into shares of the company's stock if certain conditions are met. They matter because they help companies raise money without immediate interest costs, while giving investors a chance to own part of the company later.
Rule 144A regulatory
"offered only to persons reasonably believed to be qualified institutional buyers in accordance with Rule 144A under the Securities Act"
Rule 144A is a regulation that makes it easier for companies to sell private bonds to large investors without going through all the usual rules that apply to public sales. It matters because it helps companies raise money more quickly and privately, often attracting big investors looking for special deals.
convertible note hedge transactions financial
"use a portion of the net proceeds from the offering to pay the approximately $61.2 million cost of the convertible note hedge transactions described below"
Convertible note hedge transactions are agreements made alongside convertible debt that limit the market impact when those notes convert into shares by using separate contracts that offset or neutralize the new stock issuance (for example, arranging share sales, purchases, or option contracts). Investors care because these hedges can reduce or delay dilution and dampen price swings—think of them like insurance that limits how much a conversion can dilute existing owners or move the stock price.
warrant transactions financial
"onsemi also has entered into warrant transactions with the hedge counterparties relating to the same number of shares of common stock"
Warrant transactions are the issuance, sale, transfer, exercise or cancellation of warrants — contracts that give a holder the right to buy a company’s shares at a set price for a set period. Investors care because exercising warrants can raise cash for the company but also increase the number of shares outstanding, diluting existing ownership and potentially affecting the stock price; think of warrants like gift certificates that can be turned in later for a product at a fixed cost.
fundamental change financial
"If onsemi undergoes a fundamental change (as defined in the indenture governing the notes), holders may require onsemi to repurchase"
A fundamental change is a major shift in how a company or economy operates, like a new technology or a big change in leadership. It matters because such changes can affect the value or stability of investments, making them more or less attractive. Think of it like a major upgrade or shift in the rules of a game that can change the outcome.
senior unsecured obligations financial
"The notes will be onsemi’s senior unsecured obligations and will be guaranteed by certain of its subsidiaries"
Senior unsecured obligations are loans or bonds that a company promises to pay back with its own money, but without any special guarantees or collateral. If the company runs into financial trouble, these debts are paid after other debts with priority, meaning they are less protected but still important. They matter because they show how risky it is to lend money to a company.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
(Exact name of registrant as specified in its charter)
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(Zip Code)
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(602 ) 244-6600
(Registrant’s telephone number, including area code)
Not applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:
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on which registered
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of
the Securities Exchange Act of 1934 (§240.12b-2 of this chapter)
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised
financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
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Other Events.
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On May 6, 2026, ON Semiconductor Corporation issued a press release announcing the pricing of an offering of $1.3 billion aggregate principal amount of its 0% Convertible
Senior Notes due 2031 in a private transaction that is exempt from the registration requirements of the Securities Act of 1933, as amended. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated by reference herein.
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Financial Statements and Exhibits.
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Exhibits. |
The following exhibits are filed with this report.
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Exhibit
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Description
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99.1
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Press release, dated May 6, 2026
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104
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Cover Page Interactive Data File (embedded within the Inline XBRL document)
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.
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ON SEMICONDUCTOR CORPORATION
(Registrant)
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Date: May 7, 2026
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By:
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/s/ Thad Trent
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Thad Trent
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Executive Vice President and Chief Financial Officer
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Exhibit 99.1
News Release
onsemi Announces Pricing of Private Offering of $1.3 Billion of 0% Convertible Senior Notes
SCOTTSDALE – May 6, 2026 – ON Semiconductor Corporation (Nasdaq: ON) (“onsemi”)
announced today the pricing of its private offering of $1.3 billion aggregate principal amount of 0% Convertible Senior Notes due 2031 (the “notes”) at an approximately 52.5% premium to the closing price of onsemi’s common stock on May 6, 2026 of
$105.77 per share. The notes were offered only to persons reasonably believed to be qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). onsemi has granted to the initial
purchasers of the notes an option to purchase, within a 13-day period beginning on, and including, the date on which the notes are first issued, up to an additional $200.0 million aggregate principal amount of the notes. The offering of the notes and
the convertible hedge and warrant transactions described below are expected to close on May 11, 2026, subject to customary closing conditions.
onsemi expects the net proceeds from the offering of the notes to be approximately $1,276.4 million (or approximately $1,472.9 million if the initial purchasers exercise
their option to purchase the additional notes in full) after deducting the initial purchasers’ discounts and after deducting offering expenses payable by onsemi. onsemi intends to use a portion of the net proceeds from the offering to pay the
approximately $61.2 million cost of the convertible note hedge transactions described below (after such cost is partially offset by the net proceeds to onsemi from the sale of the warrant transactions described below). In addition, onsemi expects to
use approximately $331.9 million of the net proceeds from the offering to repurchase approximately 3.1 million shares of onsemi’s common stock, par value $0.01 per share (the “common stock”), concurrently with the pricing of the offering in privately
negotiated transactions effected with or through one of the initial purchasers or its affiliate. onsemi expects to use the remainder of the net proceeds for general corporate purposes, including the repayment of outstanding indebtedness. If the
initial purchasers exercise their option to purchase additional notes, onsemi expects to enter into additional convertible note hedge transactions and warrant transactions, and intends to use a portion of the net proceeds from the sale of any such
additional notes to pay the cost of such additional convertible note hedge transactions (which would be partially offset by the net proceeds to onsemi from the sale of additional warrant transactions).
The notes will be onsemi’s senior unsecured obligations and will be guaranteed by certain of its subsidiaries. The notes will not bear regular interest, and the principal amount of the notes will not accrete. Any special interest will be payable semiannually in arrears on May 1 and November 1 of each year, beginning on
November 1, 2026 (if and to the extent that special interest is payable). The notes will mature on May 1, 2031, unless earlier repurchased, redeemed or converted. 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. The concurrent repurchases described
above may have affected the market price of the common stock concurrently with, or shortly after, the pricing of the notes, which may have resulted in a higher initial conversion price for the notes.
onsemi may redeem for cash all or any portion of the notes, at its option at any time and from time to time, on or after May 7, 2029 if the last reported sale price of
onsemi’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading-day period (including the last trading day of such period) ending on, and
including, the trading day immediately preceding the date on which onsemi provides the related notice of redemption at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid special interest, if any, to, but excluding, the redemption date. No sinking fund is provided for the notes. If onsemi undergoes a fundamental change (as defined in the
indenture governing the notes), holders may require onsemi to repurchase for cash all or part of their notes at a repurchase price equal to 100% of the principal amount of the notes to be repurchased, plus accrued and unpaid special interest, if any, to, but excluding, the fundamental change repurchase date.
In connection with the pricing of the notes, onsemi has entered into privately negotiated convertible note hedge agreements with certain of the initial purchasers of the
notes or their respective affiliates and 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 has entered into warrant
transactions with the hedge counterparties relating to the same number of shares of common stock, subject to customary anti-dilution adjustments. The warrant transactions could have a dilutive effect on the common stock to the extent that the market
price per share of the common stock exceeds the strike price of the warrants on the applicable expiration dates. The strike price of the warrant transactions will initially be $211.54 per share, which represents a premium of 100.0% over the closing
price of onsemi’s common stock of $105.77 per share on May 6, 2026 and is subject to certain adjustments under the terms of the warrant transactions. If the initial purchasers exercise their option to purchase additional notes, onsemi expects to
enter into additional convertible note hedge and warrant transactions.
In connection with establishing their initial hedge of the convertible note hedge and warrant transactions, the hedge counterparties, or their affiliates, expect to
purchase shares of the common stock and/or enter into various derivative transactions with respect to the common stock concurrently with or shortly after the pricing of the notes. These activities could have the effect of increasing, or reducing the
size of any decline in, the market price of the common stock or the notes at that time. In addition, the hedge counterparties, or their affiliates, may modify their hedge positions by entering into or unwinding various derivative transactions with
respect to the common stock and/or by purchasing or selling the common stock or other securities of onsemi in secondary market transactions prior to the maturity of the notes, and are likely to do so during any observation period related to a
conversion of notes. The effect, if any, of these activities on the market price of the common stock or the notes will depend in part on market conditions and cannot be ascertained at this time, but any of these activities could cause or prevent an
increase or decline in the market price of the common stock or the notes, which could affect holders’ ability to convert the notes and, to the extent the activity occurs during any observation period related to a conversion of notes, it could affect
the amount of cash and the number and value of shares of the common stock, if any, that holders will receive upon conversion of the notes.
The notes, guarantees and any shares of the common stock issuable upon conversion of the notes have not been registered under the Securities Act or under any U.S. state
securities laws or other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
This press release is neither an offer to sell nor a solicitation of an offer to buy any of these securities nor shall there be any sale of these securities in any state or
jurisdiction in which such an offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction.
About onsemi
onsemi (Nasdaq: ON) delivers intelligent power and sensing technologies that enable electrification, energy efficiency, safety, and automation across automotive,
industrial, and AI data center end‑markets. With a highly differentiated and innovative product portfolio, onsemi helps customers solve complex challenges to achieve higher efficiency, improved performance, and lower system cost, while supporting a
safer, cleaner, and more energy‑efficient world. The company is part of the S&P 500® index.
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onsemi and the onsemi logo are trademarks of Semiconductor Components Industries, LLC. All other brand and product names appearing in this press release
are registered trademarks or trademarks of their respective holders. Although onsemi references its website in this news release, information on the website is not to be incorporated herein.
Forward-Looking Statements
This press release includes “forward-looking statements,” as that term is defined in Section 27A of the Securities Act and Section 21E of the Exchange Act of 1934, as
amended. All statements, other than statements of historical facts, included or incorporated in this press release could be deemed forward-looking statements, particularly statements about the expected closing of the offering, the extent, and
potential effects, of the convertible note hedge and warrant transactions and the concurrent share repurchases described above, the potential dilution to the common stock and the expected use of the proceeds from the sale of the notes.
Forward-looking statements are often characterized by words such as “believes,” “estimates,” “expects,” “projects,” “may,” “will,” “intends,” “plans,” “anticipates,” “should,” “could,” “would” or similar expressions, or by discussions of strategy,
plans or intentions. All forward-looking statements in this press release are made based on onsemi’s current expectations, forecasts, estimates and assumptions, and involve risks, uncertainties and other factors that could cause results or events to
differ materially from those expressed in the forward-looking statements. Important factors that could cause onsemi’s actual results to differ materially from those anticipated in the forward-looking statements are described under Part I, Item 1A
“Risk Factors” in onsemi’s 2025 Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 9, 2026 (the “2025 Form 10-K”). Readers are cautioned not to place undue reliance on forward-looking statements. We
assume no obligation to update such information, which speaks only as of the date made, except as may be required by law.
Investing in onsemi’s securities involves a high degree of risk and uncertainty, and you should carefully consider the trends, risks and uncertainties described in this
press release, onsemi’s 2025 Form 10-K and other reports filed with or furnished to the SEC before making any investment decision with respect to onsemi’s securities. If any of these trends, risks or uncertainties actually occurs or continues,
onsemi’s business, financial condition or operating results could be materially adversely affected, the trading price of onsemi’s securities could decline, and you could lose all or part of your investment. All forward-looking statements attributable
to onsemi or persons acting on onsemi’s behalf are expressly qualified in their entirety by this cautionary statement.
Contacts
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Krystal Heaton
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Parag Agarwal
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Director, Head of Public Relations
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Vice President - Investor Relations & Corporate
Development
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onsemi
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onsemi
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(480) 242-6943
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(602) 244-3437
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krystal.heaton@onsemi.com
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investor@onsemi.com
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FAQ
What type of financing did onsemi (ON) announce in this 8-K?
onsemi announced a private offering of 0% Convertible Senior Notes due 2031 totaling $1.3 billion, sold under Rule 144A to qualified institutional buyers. These senior unsecured notes can convert into common stock at a premium share price, potentially changing onsemi’s capital structure over time.
How much money will onsemi (ON) receive from the convertible notes offering?
onsemi expects net proceeds of about $1,276.4 million from the initial $1.3 billion offering, or approximately $1,472.9 million if the initial purchasers exercise their $200.0 million option in full. These figures are after deducting underwriting discounts and estimated offering expenses payable by onsemi.
How will onsemi (ON) use the proceeds from the convertible notes?
onsemi plans to use about $61.2 million to fund convertible note hedge transactions and approximately $331.9 million to repurchase around 3.1 million shares. The remaining net proceeds will be used for general corporate purposes, including repayment of outstanding indebtedness, according to the company’s disclosure.
What is the purpose of onsemi’s convertible note hedge and warrant transactions?
The convertible note hedge transactions are designed to reduce potential dilution and offset cash payments above principal if the notes convert. onsemi also entered warrant transactions with a $211.54 strike price, which could be dilutive only if the stock trades above that level on warrant expiration dates.
When can onsemi redeem the new convertible notes before maturity?
onsemi may redeem all or part of the notes for cash on or after May 7, 2029 if its stock trades at least 130% of the then-current conversion price for 20 trading days within a 30-day period. Redeemed notes are paid at 100% of principal plus any accrued special interest.