Wolfspeed, Inc. (NYSE: WOLF) (“Wolfspeed”) today announced that
it intends to offer, subject to market conditions and other
factors, $500 million aggregate principal amount of its Convertible
Senior Notes due 2028 (the “Notes”) in a private offering (the
“Offering”) to qualified institutional buyers pursuant to Rule 144A
under the Securities Act of 1933, as amended (the “Securities
Act”). In addition, Wolfspeed expects to grant 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 $75 million aggregate
principal amount of the Notes.
The Notes will be unsecured, senior obligations of Wolfspeed,
and interest will be payable semi-annually in arrears. The Notes
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 of the Notes.
Wolfspeed intends to use a portion of the net proceeds from the
Offering to fund the cost of entering into the capped call
transactions described below. Wolfspeed intends to use the
remainder of the net proceeds from the Offering for general
corporate purposes. If the initial purchasers exercise their option
to purchase additional Notes, then Wolfspeed intends to use a
portion of the additional net proceeds to fund the cost of entering
into additional capped call transactions as described below.
In connection with the pricing of the Notes, Wolfspeed expects
to enter 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 “option
counterparties”). 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. 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 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.
In connection with establishing their initial hedges of the
capped call transactions, the option counterparties or their
respective affiliates expect to enter into various derivative
transactions with respect to Wolfspeed’s common stock and/or
purchase shares of Wolfspeed’s common stock concurrently with or
shortly after the pricing of the Notes. This activity could
increase (or reduce the size of any decrease in) the market price
of Wolfspeed’s common stock or the Notes at that time.
In addition, the option counterparties or their respective
affiliates may modify their hedge positions by entering into or
unwinding various derivatives with respect to Wolfspeed’s common
stock and/or purchasing or selling Wolfspeed’s common stock or
other of Wolfspeed’s securities in secondary market transactions
following the pricing of the Notes and prior to the maturity of the
Notes (and are likely to do so following any conversion of the
Notes, any repurchase of the Notes by Wolfspeed on any fundamental
change repurchase date, any redemption date or any other date on
which the Notes are retired by Wolfspeed, but in the case of any
repurchase by Wolfspeed not on a fundamental change repurchase date
or a redemption date, they are likely to do so if Wolfspeed
exercises its option to terminate the relevant portion of the
capped call transactions). This activity could also cause or avoid
an increase or decrease in the market price of Wolfspeed’s common
stock or the Notes, which could affect the ability to convert the
Notes and, to the extent the activity occurs during any observation
period related to a conversion of Notes, it could affect the number
of shares of Wolfspeed’s common stock and value of the
consideration that holders of Notes will receive upon conversion of
the Notes.
The Notes will be offered only to persons reasonably believed to
be qualified institutional buyers pursuant to Rule 144A under the
Securities Act. The offer and sale of the Notes and the shares of
Wolfspeed’s common stock potentially issuable upon conversion of
the Notes, if any, have not been, and will not be, registered under
the Securities Act or the securities laws of any other
jurisdiction, and unless so registered, the Notes and such shares,
if any, may not be offered or sold in the United States except
pursuant to an applicable exemption from such registration
requirements.
This press release does not constitute an offer to sell or a
solicitation of an offer to buy, nor shall there be any offer or
sale of, the Notes (or any shares of Wolfspeed’s common stock
potentially issuable upon conversion of the Notes) in any state or
jurisdiction in which the offer, solicitation or sale would be
unlawful prior to the registration or qualification thereof under
the securities laws of any such state or jurisdiction.
About Wolfspeed, Inc.
Wolfspeed leads the market in the worldwide adoption of Silicon
Carbide and gallium nitride (GaN) technologies. We provide
industry-leading solutions for efficient energy consumption and a
sustainable future. Wolfspeed’s product families include Silicon
Carbide and GaN materials, power-switching devices and RF devices
targeted for various applications such as electric vehicles, fast
charging, 5G, renewable energy and storage, and aerospace and
defense. We unleash the power of possibilities through hard work,
collaboration and a passion for innovation.
Forward Looking Statements:
This press release contains forward-looking statements involving
risks and uncertainties, both known and unknown, that may cause
actual results, performance or achievements to differ materially
from those indicated in the forward-looking statements. Actual
results could differ materially due to a number of factors,
including (i) changes as a result of market conditions or for other
reasons, (ii) the risk that the Offering will not be consummated
and (iii) the impact of general economic, industry or political
conditions in the United States or internationally. These
forward-looking statements represent Wolfspeed’s judgment as of the
date of this release. Many of the foregoing risks and uncertainties
are, and will be, exacerbated by the COVID-19 pandemic and any
worsening of the global business and economic environment as a
result. Except as required under the U.S. federal securities laws
and the rules and regulations of the Securities and Exchange
Commission, Wolfspeed disclaims any obligation to update any
forward-looking statements after the date of this release, whether
as a result of new information, future events, developments,
changes in assumptions or otherwise.
Wolfspeed® is a registered trademark of Wolfspeed,
Inc.
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version on businesswire.com: https://www.businesswire.com/news/home/20220130005021/en/
Media Relations: Joanne Latham VP, Corporate Marketing
919-407-5750 joanne.latham@wolfspeed.com
Investor Relations: Tyler Gronbach VP, Investor Relations
919-407-4820 investorrelations@wolfspeed.com
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