Specialty foundry Tower Semiconductor Ltd. (Nasdaq: TSEM; TASE: TSEM) today announced that it has received binding orders from Israeli institutional investors for $25 million (NIS 95 million) in a private placement expanding its existing Series F convertible bond.
Tower issued the Series F bond in 2010. It matures in two equal installments in December 2015 and December 2016.
Each bond was priced in the offering at NIS 0.925, a 2% discount on yesterday's closing price of NIS 0.947 on the TASE. The bonds bear an interest rate of 7.8% per annum and may be converted into shares at NIS 38.21 par value of bonds per share, reflecting a 20% premium over the share's closing price on Nasdaq yesterday.
Tower CEO Russell Elwanger said, "We are pleased by the vote of confidence in the company and its business plan." He added, "In the past year, we have redeemed $150 million of debt, mostly to bondholders, including the full redemption of the Series B and C bonds. In the current quarter, we expect to redeem in full the $30 million Series E bond."
Elwanger said, "We are constantly reviewing options for boosting our growth rate. We've already increased our sales from $100 million a year to over $600 million in line with our target of $1 billion in annual sales."
In its guidance for the third quarter, Tower expects to report $152-162 million revenue for the third quarter, 8-13.7% less than for the corresponding quarter of 2011.
Tower's share price fell 3% at the opening on Nasdaq today to $8.10, giving a market cap of $175 million, after falling 3.8% on the TASE to NIS 31.80.
Published by Globes [online], Israel business news - www.globes-online.com - on October 23, 2012
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