Borrowings under the new facility will bear interest at LIBOR plus an interest margin. The applicable interest margin is based on Vishay’s then current leverage ratio.
Based on Vishay’s current leverage ratio, borrowings bear interest at LIBOR plus 1.65 percent; Vishay is also required to pay a facility fee of 0.35 percent per annum on the entire commitment amount for a total borrowing cost, based on current leverage, of LIBOR plus 2 percent for the outstanding amount under the new credit facility.
The interest rate under the prior facility was at LIBOR plus 1.875 percent, plus a facility commitment fee of 0.35 percent per annum on the entire commitment amount for a total of LIBOR plus 2.225 percent for the outstanding amount.
The new facility also permits Vishay, upon satisfaction of certain conditions, to settle the principal amount of its 2.25 percent convertible senior notes in cash upon conversion, and settle any additional amounts in shares. The 2.25 percent convertible senior notes were issued on November 9, 2010.
Dr. Lior Yahalomi, Vishay’s CFO, said: “We are excited to capitalize on favorable credit market conditions and Vishay’s new level of business performance to obtain this five-year, $450 million credit facility at lower interest rates than we are currently paying. Combined with our strong operational performance and continued free cash generation, this facility will provide Vishay with financial flexibility to pursue our business strategy.”
JPMorgan Chase Bank. N.A. acted as administrative agent. J.P. Morgan Securities LLC acted as lead arranger and joint bookrunner. Comerica Bank and Bank Leumi USA served as joint bookrunners and co-syndication agents. The Bank of Tokyo-Mitsubishi UFJ, Ltd. and HSBC Bank USA, N.A. functioned as co-documentation agents.
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