NXP Semiconductors NV has sold $ 2 billion in bonds to help fund the development of semiconductors that reduce power consumption in products such as power adapters and electric vehicles.
The chip makerissued the two-part bond, according to a person familiar with the matter, who asked not to be identified as the details are private. The longest part of the deal, a 20-year security, is earning 1.15 percentage points above Treasuries, down from the initially targeted premium of 1.5%, the person said. This equates to about 3.30%.
The money will partly fund research and development for innovation in green chips, battery control and energy management for electric and hybrid cars, smart building technologies, as well as measures to energy efficiency at NXP’s own facilities, the company said in a statement.statement Tuesday. The funds were raised by the NXP subsidiaries BV, NXP Funding LLC and NXP USA Inc. The companyraised $ 1 billion in green debt in April 2020.
Businesses and governments around the world have raised about $ 156 billion in green bonds this year, almost tripling the roughly $ 58 billion issued during the same period in 2020, according to data compiled by Bloomberg. The tech sector was not a huge contributor, accounting for just 1.2% of this year’s total.
Semiconductors are essential components for many aspects of modern life and used in everything from washing machines, cars and computers. As chips have become incredibly powerful and efficient, using less and less energy, their production has become increasingly more elaborate work. Chipmakers globally recognize that there is agiant carbon footprint problem in their manufacture.
NXP said it has reduced absolute emissions of perfluorinated compounds (PFCs), which are greenhouse gases, by 66%. Intel Corp., the world’s largest chipmaker, said it was already among the top three users of renewable energy in the United States.from bad to worse with automakers on three continents joining tech giants Apple Inc. and Samsung Electronics Co. in signaling production cuts and revenue losses due to the crisis.
Considerable demand for the NXP offering could push 10-year supply spreads down to 100 basis points, “as double-digit income growth and credit quality remain on an improving path,” said Bloomberg Intelligence analysts Robert Schiffman and Suborna Panja writes in anote Tuesday.
The Eindhoven, Netherlands-based company has around 29,000 employees in more than 30 countries and generated $ 8.61 billion in revenue last year.
Barclays Plc, Citigroup Inc. and Credit Suisse Group AG handled the sale, the person said.
– With the help of Andy Kostic