ON Semiconductor traded up to 97 last week after the company announced that it would pay down part of its term loan with proceeds from a $300 million senior secured note offering. Bids have been rising over the past month with more than $100 million changing hands, dealers said. One dealer referred to the name as a "dead cat rising," after discussing how the credit had traded as low as 68. The name was pulled down by general fear of a semiconductor meltdown in the fall of 2001, explained one trader. The new notes mature in May 2008 with a coupon of 12%.
Last April, a $15 million piece of the company's bank debt traded in the 87 1/2-88 1/2 range, down from 90. Dealers attributed the dip to general weakness in the sector, but expected levels to remain steady (LMW, 4/01). The company has also filed a shelf registration statement for up to 40 million shares of common stock. Calls toJohn Kurtzweil, senior v.p. and cfo, were referred to a spokesman who did not return calls by press time.