) is expected to fetch net $991.8 million from the $1.0 billion
public offering of senior unsecured notes. The company expects to
use the proceeds for redemption/conversion of its 3.125% Junior
Subordinated Convertible Debentures due 2037. The scheduled date
fixed for the proposed redemption/conversion of the debenture is
Mar 17, 2014.
The current issue of the $1.0 billion senior notes are divided
into two denominations of $500.0 million each with coupon rate of
2.125% and 3.000%, and set to mature on Mar 15 of 2019 and 2021,
respectively. Xilinx has appointed J.P. Morgan Securities LLC and
J. Wood Capital Advisors LLC as the book-running manager and
financial advisor, respectively.
It is worth noting that, Xilinx has $934.4 million of
convertible debentures in its balance sheet as of Dec 28, 2013.
Thus, the current $1.0 billion issue at a relatively lower coupon
rate to redeem/convert the debentures would be beneficial for the
Xilinx has a strong balance sheet with cash and cash
equivalents of $2.46 billion as of Dec 28, 2013 compared to $2.26
billion in the prior quarter. Moreover, Xilinx generated $216.0
million of cash from operations and incurred $11 million in
Additionally, we commend the company's rapid adoption of 28-nm
nodes driven by higher wireless deployments and strength in the
wired communication segment. Moreover, the China LTE market
presents Xilinx with an opportunity to drive its top-line growth,
However, stiff competition from
) and dwindling PC (significant consumer for semiconductor chips)
market sales keep us concerned for the near term.
Currently, Xilinx has a Zacks Rank #3 (Hold). Investors can
also consider stocks such as
), both sporting a Zacks Rank #1 (Strong Buy).
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