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Infineon raises EUR 1.2 billion to re-finance Cypress acquisition

Infineon Technologies has successfully launched and priced its inaugural EUR 1.2 billion dual-tranche hybrid bond, the proceeds of which will used to re-finance the proposed Cypress acquisition and for general corporate purposes.

“With the hybrid bond issuance, which is following our share placement in June, we have taken a further significant step in re-financing and de-risking the Cypress transaction,” said Dr. Sven Schneider, Chief Financial Officer of Infineon.

“The instrument is contributing substantially to the envisaged equity portion of the overall financing. The issuance clearly shows investors’ trust in the prospects of Infineon as well as the future combined company and puts us in a position of great flexibility with respect to timing and instruments for the remaining re-financing needed.”

The hybrid bond, which will be listed on the Luxemburg Stock Exchange, consists of two EUR 600 million perpetual tranches. Tranche 1 has a non-call period from issuance of 5.5 years and a fixed coupon of 2.875% until first reset date. Tranche 2 has a non-call period of 8.5 years and a fixed coupon of 3.625%.

According to Infineon, the order book for both hybrid tranches was well oversubscribed enabling a diversified distribution among international institutional investors including fund managers, insurance companies, pension funds and banks.

S&P Global Ratings has assigned an issue rating of BB+ to the two tranches of the hybrid note. The bonds are expected to receive intermediate equity content (50% equity credit), once Infineon closes the acquisition of Cypress.

Neil Tyler

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