The NAND flash controller firm will issue convertible senior notes due 2031, with proceeds earmarked for corporate needs and debt repayment.
Silicon Motion Technology shares declined nearly 8% in pre-market trading after announcing a $800 million convertible senior notes offering due August 2031. The notes, sold privately to qualified institutional buyers, may expand to $920 million if initial purchasers exercise a $120 million option within 13 days.
The notes will not pay regular interest and rank as senior unsecured obligations. Investors can convert them under specific conditions before May 2031, with conversion available anytime thereafter until maturity. The company plans to settle principal in cash, while any excess value may be paid in cash, shares, or a combination.
Proceeds will fund general corporate purposes and repay existing debt. The offering reflects Silicon Motion’s strategy to optimize its capital structure amid ongoing operational demands.