DURHAM – Wolfspeed (NYSE: WOLF) is turning to investors to raise $650 million in a debt fundraiser. That’s $150 million more than originally reported and is a reaction to interest in the notes, the Durham-based semiconductor and power/radio frequency solutions manufacturer says.
“The offering size was increased from the previously announced offering size of $500.0 million aggregate principal amount of notes,” the company explained Monday after the markets closed.
“In addition, Wolfspeed has granted the initial purchasers of the Notes 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 $100.0 million aggregate principal amount of the Notes.”
Wolfspeed reported losing money in its most recent quarter but beat Wall Street estimates.
The company is building a new semiconductor manufacturing facility in New York.
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If the options are exercised, the net total in proceeds is expected to be more than $732 million, Wolfspeed (formerly known as Cree) said.
Of the capital, Wolfspeed said it would use nearly $94 million for so-called “capped call transactions.”
“Wolfspeed entered into privately negotiated capped call transactions with one or more of the initial purchasers of the Notes or their affiliates (the option counterparties). The capped call transactions 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. If the initial purchasers exercise their option to purchase additional Notes, Wolfspeed expects to enter into additional capped call transactions with the option counterparties,” the company explained.
“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 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.”
