STMicroelectronics : announces (i) a US$1.5 billion dual-tranche offering of New Convertible Bonds, (ii) the early redemption of its 2019 Convertible Bonds and (iii) the launch of a share buy-back programme ...

PR N° C2823C

Press release

This announcement is not an offer to sell or a solicitation to buy securities in any jurisdiction, including the United States, Australia, Canada, Japan or South Africa. Neither this announcement nor anything contained herein shall form the basis of, or be relied upon in connection with, any offer or commitment whatsoever in any jurisdiction.

AMSTERDAM, 22 June 2017 -- STMicroelectronics N.V. (the "Company" or "STMicroelectronics") announces today the launch of a US$1.5 billion offering of senior unsecured bonds convertible into new or existing ordinary shares of STMicroelectronics (the "Shares") (the "New Convertible Bonds"), the early redemption of the outstanding US$600 million Zero Coupon Convertible Bonds due 2019 (ISIN: XS1083956307, the "2019 Convertible Bonds") and the launch of a share buy-back programme intended to meet obligations arising from debt financial instruments that are exchangeable into equity instruments and to meet obligations arising from share award programmes.

The New Convertible Bonds will be offered in two tranches (with a minimum size of US$500 million for each tranche) with a maturity of 5 years and 7 years. The terms of the New Convertible Bonds are expected to contain customary provisions which will allow the Company to satisfy conversion rights on the New Convertible Bonds with a combination of cash, new Shares and treasury Shares, or cash or Shares only including, unless the Company elects otherwise, by way of net share settlement. The offering proceeds, net of costs (including costs in respect of the share buy-back programme), will be used by STMicroelectronics for general corporate purposes, including the early redemption of the 2019 Convertible Bonds and the future redemption of the outstanding US$400 million 1.00 per cent. Convertible Bonds due 2021 (ISIN: XS1083957024).

A net share settlement is the default settlement scenario under the New Convertible Bonds, and the Company's share buy-back programme is designed to equal or exceed the number of Shares required to be delivered on the exercise of conversion rights under the New Convertible Bonds, assuming a net share settlement.

The Company proposes to issue the two tranches of New Convertible Bonds as follows:

• The 5-year maturity New Convertible Bonds will not bear interest. The New Convertible Bonds will be issued at 100.00% - 102.53% of their principal amount and will be redeemed at 100% of their principal amount on 3 July 2022, unless previously redeemed, converted or purchased and cancelled. This corresponds to an initial gross yield to maturity range between (0.5)% - 0.0%; and

• The 7-year maturity New Convertible Bonds will bear interest at an annual rate between 0.0% - 0.5%, payable semi-annually in arrear. The New Convertible Bonds will be issued at 100% of their principal amount and will be redeemed at 100% of their principal amount on 3 July 2024, unless previously redeemed, converted or purchased and cancelled. This corresponds to an initial gross yield to maturity range between 0.0% - 0.5%.

  The initial conversion prices for the New Convertible Bonds are expected to be set:

• In relation to the 5-year maturity New Convertible Bonds, at a premium between 35% - 40%; and

• In relation to the 7-year maturity New Convertible Bonds, at a premium between 35% - 40%,

  in each case over the volume-weighted average price of the Shares between opening of trading today and pricing of the offering on the Mercato Telematico Azionario organised and managed by Borsa Italiana S.p.A., converted into US dollars at the prevailing exchange rate at the time of pricing.

  The final terms of the New Convertible Bonds are expected to be determined and announced later today and settlement is expected to take place on or about 3 July 2017.

  Application will be made for the New Convertible Bonds to be admitted to trading on the Open Market (Freiverkehr) segment of the Frankfurt Stock Exchange.

  In the context of this offering, the Company has committed to a lock-up of 90 days in respect to the Shares and related securities.

  Morgan Stanley and Société Générale Corporate & Investment Banking are acting as Joint Global Coordinators and Joint Bookrunners and Citigroup Global Markets Limited, J.P. Morgan and UniCredit are acting as Joint Bookrunners in respect of the offering.

  Early redemption of the 2019 Convertible Bonds

  The Company will today give notice to the holders of the 2019 Convertible Bonds to redeem all of the 2019 Convertible Bonds on 24 July 2017 at their principal amount in accordance with Condition 7(b)(ii) of the terms and conditions of the 2019 Convertible Bonds.

  Holders of the 2019 Convertible Bonds are entitled to exercise their rights to convert their 2019 Convertible Bonds into Shares, cash or a combination of Shares and cash by reference to the prevailing conversion price, currently US$12.1275 per Share, in accordance with Condition 6(a) of the terms and conditions of the 2019 Convertible Bonds. If holders of the 2019 Convertible Bonds exercise their conversion rights, the Company intends to settle such exercise through the payment of cash and delivery of Shares pursuant to the Net Share Settlement provisions of Condition 6(a)(ii) of the terms and conditions of the 2019 Convertible Bonds.

  Launch of share buy-back programme

  The Company also announces the launch of a share buy-back programme of up to 19 million Shares for an amount up to US$297 million intended to meet obligations arising from debt financial instruments that are exchangeable into equity instruments and to meet obligations arising from share award programmes.

  The share buy-back programme was authorised pursuant to a resolution passed at the Company's Annual General Meeting of Shareholders, which, among other things, granted authorization for the repurchase of Shares over a period of eighteen months, ending on 20 December 2018. The share buy-back programme may terminate earlier than this date, and any such earlier termination shall be immediately announced.

  The Company will appoint one broker to execute the share buy-back programme in accordance with all applicable regulations. The broker will make decisions relating to the purchase of Shares independently, including with respect to the timing of any purchases, and all purchases effected will be in compliance with applicable daily limits on prices and volumes.

  The share buy-back programme will be subject to the following terms:

• The maximum number of Shares to be repurchased is 19 million Shares, representing approximately 2.1% of the ordinary share capital of the Company as of 15 June 2017; and

• The price paid for any Share purchased pursuant to the buy-back programme shall be subject to a minimum of €1.04 and a maximum of 110% of the average of the highest price at which the Shares are quoted on each of the five trading days prior to the date of the relevant purchase, on each of the regulated market of Euronext Paris, the New York Stock Exchange and Mercato Telematico Azionario organised and managed by Borsa Italiana S.p.A.

Purchases of Shares will be made on one or more trading venues, which may include the regulated market of Euronext Paris, and the Mercato Telematico Azionario organised and managed by Borsa Italiana S.p.A..

The costs that the Company may incur in connection with the purchase of the Shares pursuant to the share buy-back programme will depend on the price and the terms on which actual purchases are made.

The Company will announce details of any share purchases effected pursuant to the buy-back programme, as required by applicable laws and regulations.

As of 15 June 2017, the Company holds approximately 23.3 million treasury Shares, representing approximately 2.6% of its ordinary share capital.

About STMicroelectronics

STMicroelectronics is a global semiconductor leader delivering intelligent and energy-efficient products and solutions that power the electronics at the heart of everyday life. STMicroelectronics' products are found everywhere today, and together with our customers, we are enabling smarter driving and smarter factories, cities and homes, along with the next generation of mobile and Internet of Things devices. By getting more from technology to get more from life, STMicroelectronics stands for life.augmented.

In 2016, the Company's net revenues were US$6.97 billion, serving more than 100,000 customers worldwide. Further information can be found at www.st.com.

Inside information

This press release relates to the disclosure of information that qualified, or may have qualified, as inside information within the meaning of Article 7(1) of the EU Market Abuse Regulations.

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This announcement does not constitute or form part of an offer to sell securities or the solicitation of any offer to subscribe for or otherwise buy any securities to any person in the United States, Australia, Canada, Japan, South Africa or in any jurisdiction to whom or in which such offer or solicitation is unlawful. The securities referred to in this announcement have not been and will not be registered in the United States under the US Securities Act of 1933, as amended (the "Securities Act") and may not be offered or sold in the United States unless registered under the Securities Act or offered or sold in a transaction exempt from, or not subject to, the registration requirements of the Securities Act. Subject to certain exceptions, the securities referred to herein may not be offered or sold in Australia, South Africa, Canada or Japan or to, or for the account or benefit of, any national, resident or citizen