The bond would be convertible into up to 69 million Infineon shares, or the equivalent amount in cash or a combination of both, but only after a minimum of three years, the company said in a statement.

The coupon and conversion premium would be set when the bond was priced later on Wednesday, Infineon added.

Infineon said it was issuing the convertible bond "to benefit from the attractive financing opportunity available in the current convertible market given the low interest rate and high volatility environment."

The proceeds from the issue would "serve to further strengthen Infineon's financial position and support our long-term strategy," it added.

The bond would be placed with institutional investors outside the United States.

Goldman Sachs and Morgan Stanley were the bookrunners.

Meanwhile, investors appeared to be non-plussed by the announcement and Infineon shares tumbled more than eight percent in Frankfurt.

In early trade on the stock exchange, Infineon shares were showing a loss of 8.84 percent at 6.39 euros in a slightly firmer market.

"The group clearly needs to improve its liquidity position," one trader said.

But the sell-off could also be partly a technical reaction to the strong gains notched up by Infineon shares on Tuesday, he added.

SPACE.WIRE