16 April 2020
Cree offers $500m of convertible senior notes
Cree Inc of Durham, NC, USA (which makes LEDs and silicon carbide- and gallium nitride-based RF & power semiconductors) intends to offer (subject to market conditions and other factors) $500m aggregate principal amount of its convertible senior notes due 2026 in a private offering to qualified institutional buyers. In addition, Cree expects to grant the initial purchasers an option to purchase (for settlement within a 13-day period from, and including, the date on which the notes are first issued) up to a further $75m of the notes.
The notes will be unsecured senior obligations of Cree, and interest will be payable semi-annually in arrears. They will be convertible into cash, shares of Cree’s common stock, or a combination thereof, at Cree’s election. The interest rate, initial conversion rate, repurchase or redemption rights and other terms are to be determined upon pricing of the offering by negotiations between Cree and the initial purchasers of the notes.
Cree intends to use part of the net proceeds to repurchase up to $200m of its outstanding 0.875% convertible senior notes due 2023 in privately negotiated transactions. Cree intends to use the remainder of the net proceeds for general corporate purposes.