Whom did NXP Semiconductors’ distressed bond exchange ultimately benefit: NXP bondholders, or the private equity firm which sponsored the deal?
NXP was a peak-cycle LBO in a highly cyclical industry (semiconductors) which came close to filing for bankruptcy in 2008, during the perfect storm of the credit crisis and a cyclical trough in the semiconductor industry. By late 2009 NXP Semiconductors was enjoying a healthy rebound, with its equity price rallying. NXP Semiconductors’ shareholders bought time, optionality, and ultimately made themselves whole without paying a dime through distressed bond exchanges. This case asks students to craft an investment thesis for participating in one of NXP Semiconductors’ distressed bond exchanges.
Case ID: 180306