Freescale looking for more debt
Freescale wants to raise another $500m in debt to pay back shorter term debt and reduce its interest burden.
The interest payable on the new debt will be determined by the market’s response to the offer of Senior Notes.
Freescale says it hopes to get an interest rate of 6%. It is currently paying 10%. If it achieves 6% it will reduce its interest payments by $30m a year from its present level of $530m a year.
Freescale has been struggling with debt since 2006 when private equity company Blackstone bought the company for $17.6bn and loaded $10bn debt onto the company as a way of defraying some of the purchase price.
Since then Freescale has managed to bring the debt load down to $6.6bn.
The company has been chronically loss-making – losing $400m on sales of $4.5bn last year.