21 July 2010


RFMD repurchases and retires $110m of convertible notes

RF Micro Devices Inc of Greensboro, NC, USA has used cash on hand to repurchase and retire $110m aggregate principal amount of its outstanding convertible subordinated notes: $100m due in 2012 (equal to 51% of all outstanding 2012 notes) and $10m due 2010 (100% of all outstanding 2010 notes). The 2012 notes were repurchased and retired early (paying $0.97 per $1.00 of par value) and the 2010 notes at maturity (paying the principal, or face, amount). The aggregate principal amount of 2012 notes outstanding is now $97.7m.

As a result of the repurchase and early retirement, RFMD expects to eliminate future cash interest expense of about $1.3m between now and when the 2012 notes mature in April 2012. Since the March 2008 quarter, RFMD has repurchased 30 million shares of its common stock and retired about $372m original principal amount of its total convertible debt.

“RFMD’s robust business model and resulting strong free cash flow are enabling us to enhance our capital structure significantly,” says chief financial officer Dean Priddy. “Looking forward, we are forecasting continued strong free cash flow, and our potential uses of cash include share buybacks, additional bond repurchases and incremental investment in our growth strategy.” 

RFMD defines free cash flow as net cash provided by operating activities during the period, minus property and equipment expenditures made during the period.

See related items:

RFMD expects positive net cash position in 2010

Strong demand gives RFMD 51.4% increase in revenue year-on-year

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