NXP appears to have partly succeeded in its debt exchange, though a company spokesman said that the process is still on-going and is unable to comment on it.
NXP has announced it has been offered $420m and €131m for the $1.7bn of bonds tendered to reduce the total $5.9bn worth of debt loaded onto the company by its private equity owner Kohlberg Kravis and Roberts after buying 80% of NXP in autumn 2006.
NXP has said that it wants to try and reduce the debt by $1bn by exchanging unsecured debt with new secured debt which would rank higher in its claims to a share of NXP’s assets in the event of NXP being liquidated.
"The tendered amounts on Tuesday equate to 100 per cent of the outstanding principle amount of the existing notes, with in total about $5.8bn tendered to the exchange offer," said NXP.
NXP followed the example of Freescale Semiconductor which was also loaded up with massive debt by another private equity buyer - Blackstone. Freescale had $10bn worth of debt loaded on to it by Blackstone.
See Blackstone in it for the long haul, says Freescale CEO Rich Beyer
In February, Freescale had a debt buy-back which knocked $1.5-2bn off its debt burden and $100m off its interest payments on the debt, reducing them from $700m a year to $600m.
Although NXP’s exchange appears to have been successfully completed, the tender remains open until March 30th.