Company: TSEM
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001178913-25-001537
Chunk: 166

Company: TOWER SEMICONDUCTOR LTD
Filing Date: 2025-04-30
Form: 20-F
Item: Item 5
Chunk 166
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. See “ Item 3. Key
Information - D. Risk Factors - Risks Affecting Our Business - We may be required to obtain
financing for capacity acquisition related transactions, strategic and/or other growth or M& A opportunities, which we may not be able
to obtain.”

43

Recent Financing Transactions

Capital Leases

Certain of our subsidiaries enter into capital lease agreements,
from time to time, for machinery and equipment, usually for a period of four years, with an option to buy the machinery and equipment
after a period of between three to four years from the start of the lease period. These lease agreements contain annual interest rates
of approximately 2%, and the assets under the lease agreements are pledged to the lender until the time at which the respective subsidiary
acquires the assets. The obligations under the capital lease agreements are guaranteed by Tower, except for TPSCo’s obligations
under its capital lease agreements.

In addition, TPSCo leases its facilities and buildings in Japan
from NTCJ under a long-term capital lease, with a term until March 2032.

As of December 31, 2024 and 2023, the total outstanding capital
lease liabilities for fixed assets were $73.5 million and $118.3 million, respectively, of which $24.8 million and $40.3 million, respectively,
were included under current maturities of long-term debt. The available lease lines as of December 31, 2024 and 2023 were approximately
$10 million and $45.0 million, respectively.

Loans from Japanese Financial Institutions

In December 2021, TPSCo refinanced its then existing loan with
an 11 billion JPY (approximately $70 million as of December 31, 2024) asset-based loan with a consortium of financial institutions consisting
of (i) JA Mitsui Leasing, Ltd., (ii) Mitsubishi HC Capital Inc., (iii) Taishin International Bank Co., Ltd. Tokyo Branch, and (iv) BOT
Lease Co. Ltd. (the “2021 JPY Loan”). The 2021 JPY Loan carries a fixed interest rate of 1.95% per annum with principal payable
in seven semiannual payments from December 2024 until December 2027. The 2021 JPY Loan is secured mainly by a lien over the machinery
and equipment of TPSCo located in the Uozu and Tonami facilities.

In September