Execution of Syndicated Loan Agreement

To finance a portion of the funds necessary for the acquisition of IDT, as announced in the press release Execution of Term Loan Agreement for IDT Acquisition issued on October 11, 2018, Renesas entered into a term loan agreement.

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Tuesday, January 15, 2019
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Technology, Hardware, Internet, Software, Semiconductor, Economy, Money, Finance, Loans, Credit, Personal finance, Renesas Electronics, Mortgage, Syndicated loan, Refinancing, Loan agreement, Government procurement in the United States
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Summary
Key Points: 
  • To finance a portion of the funds necessary for the acquisition of IDT, as announced in the press release Execution of Term Loan Agreement for IDT Acquisition issued on October 11, 2018, Renesas entered into a term loan agreement.
  • Today, Renesas has terminated this term loan agreement and has newly entered into a syndicated loan agreement as described below.
  • (A) Term loan with availability period: 698.0 billion yen
    (3) Execution date of agreement: January 15, 2019
    (A) Term loan with availability period:
    From the day four business days prior to the completion date of acquisition of IDT until December 11, 2019
    (A) Term loan with availability period:
    Renesas intends to refinance other existing term loan, and to finance funds necessary for the acquisition of IDT and working capital as the medium-and- long term funds.
  • (Note): The initial drawdown of (A) Term loan with availability period and the drawdown of (B) Term loan are scheduled to occur in the first half of the fiscal year ending December 31, 2019, when Renesas expects the completion of the acquisition of IDT.


As announced in the press release “Regarding
Acquisition of Stock of Integrated Device Technology, Inc.”
issued on September 11, 2018, Renesas Electronics Corporation
(“Renesas”, TSE: 6723), a premier supplier of advanced semiconductor
solutions, resolved at the Meeting of Board of Directors held on
September 11, 2018 to reach an agreement with Integrated Device
Technology, Inc (“IDT”, NASDAQ: IDTI), whereby IDT will become a
wholly-owned subsidiary of Renesas, and has thus concluded a merger
agreement with IDT.

In accordance with the merger agreement, Renesas expects to acquire all
of the shares in IDT at a price of US$6.7 billion (approximately ¥733.0
billion at an exchange rate of 110 yen to the dollar) through a merger
of IDT with Renesas’ wholly-owned subsidiary to be established in
Delaware, United States for the purpose of the acquisition of IDT (a
reverse triangular merger). To finance a portion of the funds necessary
for the acquisition of IDT, as announced in the press release “Execution
of Term Loan Agreement for IDT Acquisition” issued on October
11, 2018, Renesas entered into a term loan agreement. Today, Renesas has
terminated this term loan agreement and has newly entered into a
syndicated loan agreement as described below.

Following approval by IDT shareholders and the relevant regulatory
authorities, the acquisition is expected to be completed within the
first half of the fiscal year ending December 31, 2019.

 
1. Overview of the syndicated loan agreement
(1) Total amount: 897.0 billion yen
 
(2) Loan type:

(A) Term loan with availability period: 698.0 billion yen

(B) Term loan: 149.0 billion yen
(C) Commitment line loan: 50.0 billion yen
 
(3) Execution date of agreement: January 15, 2019
 
(4) Availability/Commitment period:
(A) Term loan with availability period:     From the day four business days prior to the completion date of
acquisition of IDT until December 11, 2019
(B) Term loan: -
(C) Commitment line: Five years from the date of drawdown of (B)
Term loan
 
(5) Repayment Date:
(A) Term loan with availability period: Date that is five years from the date of initial drawdown of this
loan
(B) Term loan: Date that is 5 years from the date of drawdown of
this loan

(C) Commitment line: Date designated by Renesas that is within six
months from each drawdown

 

(6) Participating financial institutions:

MUFG Bank, Ltd., Mizuho Bank, Ltd., Sumitomo Mitsui Trust Bank,
Limited and other 5 financial institutions

 

2. Purpose

Renesas intends to refinance other existing term loan, and to
finance funds necessary for the acquisition of IDT and working
capital as the medium-and- long term funds.

 

3. Future expectations

While the influence of the transaction on Renesas business
performance has not yet been determined at present, Renesas will
make an announcement in a timely manner once any material impact
is made to its business performance.

 

(Note): The initial drawdown of (A) Term loan with availability period
and the drawdown of (B) Term loan are scheduled to occur in the first
half of the fiscal year ending December 31, 2019, when Renesas expects
the completion of the acquisition of IDT.

About Renesas Electronics Corporation

Renesas Electronics Corporation (TSE:
6723) delivers trusted embedded design innovation with complete
semiconductor solutions that enable billions of connected, intelligent
devices to enhance the way people work and live—securely and safely. A global
leader in microcontrollers, analog, power, SoC products and integrated
platforms, Renesas provides the expertise, quality, and comprehensive
solutions for a broad range of Automotive, Industrial, Home Electronics,
Office Automation and Information Communication Technology applications
to help shape a limitless future. Learn more at renesas.com.

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