FEI to repay $150 million of convertible notes

Chip testing company FEI Co. said Tuesday it plans to retire substantially all of its $150 million of convertible subordinated notes, and has entered into a new revolving credit agreement with JPMorgan Chase.

FEI plans to use existing cash to repay $148.9 million of the 0 percent notes on June 16. The retirement of the notes will reduce the number of common shares outstanding by 12 percent, or about 5.5 million shares, the company said. It also improves the company's debt-to-capital ratio to 18 percent from 34 percent.

The company plans to use the new $100 million, five-year senior secured revolving credit agreement for general corporate purposes, working capital, facility expansion and acquisitions. The floating-rate facility is expandable to $150 million under certain circumstances, FEI said.

FEI shares rose $2.04, or 9.1 percent, to $24.54 in morning trading.