AES Semigas

IQE

16 November 2022

Wolfspeed raising $1.3bn in private offering

Wolfspeed Inc of Durham, NC, USA – which makes silicon carbide materials as well as silicon carbide (SiC) and gallium nitride (GaN) power-switching & RF semiconductor devices – is offering, subject to market conditions and other factors, $1300m of its convertible senior notes due 2029 in a private offering to persons reasonably believed to be qualified institutional buyers (pursuant to Rule 144A under the Securities Act of 1933, as amended). In addition, Wolfspeed 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 an additional $200m of the notes.

The notes are unsecured, senior obligations of Wolfspeed, and interest will be payable semi-annually in arrears. They will be convertible into cash, shares of Wolfspeed’s common stock, or a combination thereof, at Wolfspeed’s election. The interest rate, initial conversion rate, repurchase or redemption rights and other terms of the notes are to be determined upon pricing of the offering by negotiations between Wolfspeed and the initial purchasers.

Wolfspeed intends to use part of the net proceeds to fund the cost of entering into privately negotiated capped call transactions with one or more of the initial purchasers of the notes or their affiliates and/or other financial institutions. The remainder will be used for general corporate purposes. If the initial purchasers exercise their option to purchase additional notes, then Wolfspeed intends to use part of the additional net proceeds to fund the cost of entering into additional capped call transactions.

The capped call transactions are expected to cover (subject to anti-dilution adjustments substantially similar to those applicable to the notes) the number of shares of Wolfspeed’s common stock that will initially underlie the notes.

The capped call transactions are expected generally to reduce the potential dilution to Wolfspeed’s common stock upon any conversion of the notes and/or offset any potential cash payments that Wolfspeed is required to make in excess of the principal amount of the converted notes, as the case may be, upon conversion of the notes. If, however, the market price per share of Wolfspeed’s common stock (as measured under the terms of the capped call transactions) exceeds the cap price of the capped call transactions, there would nevertheless be dilution and/or there would not be an offset of such potential cash payments, in each case, to the extent that such market price exceeds the cap price of the capped call transactions.

See related items:

Wolfspeed to build largest SiC materials plant in Chatham County, North Carolina

Tags: Wolfspeed SiC substrates Power electronics

Visit: www.wolfspeed.com

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