onsemi (NASDAQ: ON) announced the pricing of a private offering of $1.3 billion in convertible senior notes due 2031. The notes carry a 0% interest rate and were priced at approximately 52.5% premium to the company's closing stock price of $105.77 per share on May 6, 2026.

The semiconductor company granted initial purchasers an option to buy up to an additional $200 million in notes within 13 days of issuance. The offering is expected to close on May 11, 2026, subject to customary closing conditions.

onsemi expects net proceeds of approximately $1.28 billion, or $1.47 billion if the additional notes option is exercised in full, after deducting discounts and expenses. The company plans to use $331.9 million of proceeds to repurchase approximately 3.1 million shares of common stock in privately negotiated transactions. Additional funds will cover convertible note hedge transaction costs and general corporate purposes, including debt repayment.

The notes feature an initial conversion rate of 6.1997 shares per $1,000 principal amount, equivalent to a conversion price of approximately $161.30 per share. The company may redeem the notes starting May 7, 2029, if its stock price reaches at least 130% of the conversion price for 20 trading days within any 30-day period.

In connection with the offering, onsemi entered into convertible note hedge agreements and warrant transactions with initial purchasers and financial institutions. The warrant transactions carry a strike price of $211.54 per share, representing a 100% premium over the May 6 closing price.

The notes were offered only to qualified institutional buyers under Rule 144A of the Securities Act of 1933.