Silicon Motion prices $1B convertible notes offering due 2031

Silicon Motion Technology Corporation (NASDAQ: SIMO) priced a $1.0 billion offering of convertible senior notes due 2031, according to a press release. The offering size was increased from an initially announced $800 million.

The notes carry a 0.00% interest rate and will mature on August 15, 2031. The issuance is scheduled to settle on August 13, 2026, subject to customary closing conditions. Silicon Motion also granted initial purchasers an option to buy up to an additional $150 million in notes within 13 days of issuance, which would bring total net proceeds to approximately $1.127 billion if fully exercised.

The initial conversion rate is set at 2.6281 American depositary shares (ADSs) per $1,000 principal amount, representing a conversion price of approximately $380.50 per ADS. That price reflects a 65% premium over Silicon Motion's last reported ADS sale price of $230.61 on the Nasdaq Global Select Market on August 10, 2026.

Silicon Motion estimates net proceeds of approximately $980 million after deducting initial purchaser discounts, before estimated offering expenses. The company said it intends to use proceeds for general corporate purposes and to repay amounts outstanding under its existing credit agreement.

The notes are senior, unsecured obligations sold in a private offering to qualified institutional buyers under Rule 144A of the Securities Act of 1933. They have not been registered under the Securities Act and cannot be publicly offered or sold without an applicable exemption.

Silicon Motion may redeem the notes for cash on or after August 20, 2029, if the ADS price equals or exceeds 130% of the conversion price for a specified period. Holders may require repurchase upon a fundamental change or on August 15, 2029, at the principal amount plus any accrued special interest.

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