26 June 2023
Wolfspeed raises $1.25bn via Apollo Credit, plus $750m accordion feature
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 – has announced a $1.25bn secured note financing from an investment group led by Apollo, with an accordion feature for up to an additional $750m.
The financing supports the firm’s US expansion efforts (announced in September 2022) and is a significant step toward achieving its $6.5bn global capacity expansion plan. Execution of Wolfspeed’s US growth plan will accelerate adoption of silicon carbide across a wide array of end markets and support job creation in US semiconductor manufacturing, says the firm.
The 9.875% notes will mature in 2030 and are optionally prepayable by the company based on the terms of the indenture governing the notes. The investment was led by funds managed by Apollo’s ~$450bn Credit business.
“The group’s commitment to Wolfspeed further validates the importance of silicon carbide to the global energy transition,” says Wolfspeed’s president & CEO Gregg Lowe. “This important step in our financing provides significant capital to scale up near-term operations at our Mohawk Valley Fab and construction of our Siler City materials facility to help us capture the growing silicon carbide market opportunity. The financing positions Wolfspeed to continue to lead the growth of the industry and focus on the execution of our vertically integrated strategy to meet growing demand,” he adds.
“Our agreement with Apollo and its capital partners achieves our near-term funding targets while prioritizing our shareholders with a new, non-dilutive source of financing,” notes chief financial officer Neill Reynolds. “Apollo and its capital partners’ investment follows an extensive review of our business and demonstrates their conviction in our team, operating plan and trajectory,” he adds.
“Apollo is pleased to provide a dynamic and flexible credit solution to Wolfspeed as it significantly expands its silicon carbide manufacturing capacity,” says Apollo Credit partner Joseph Jackson. “The company’s growth plan is designed to deliver critical silicon carbide products for a range of automotive and industrial uses, and support sustainability goals with market-leading technology,” he comments. “With the help of our capital partners, we have crafted a facility that can provide up to $2bn to ramp the company’s expansion plans.”