Wolfspeed, Inc. (NYSE: WOLF) (“Wolfspeed”) today announced the
pricing of $650.0 million aggregate principal amount of its 0.25%
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”). The offering size was increased from the
previously announced offering size of $500.0 million aggregate
principal amount of notes. 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.
The sale of the Notes to the initial purchasers is expected to
settle on February 3, 2022, subject to the satisfaction of
customary closing conditions, and is expected to result in
approximately $634.6 million in net proceeds to Wolfspeed (or
approximately $732.3 million if the initial purchasers exercise
their option to purchase additional Notes in full) after deducting
the initial purchasers’ discount and estimated offering expenses
payable by Wolfspeed.
The Notes will be unsecured, senior obligations of Wolfspeed.
The Notes will bear interest at a rate of 0.25% per year. Interest
will be payable semi-annually in arrears on February 15 and August
15 of each year, beginning on August 15, 2022. The Notes will
mature on February 15, 2028, unless earlier repurchased, redeemed
or converted.
Wolfspeed intends to use approximately $93.7 million 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.
The initial conversion rate for the Notes is 7.8602 shares of
Wolfspeed’s common stock per $1,000 principal amount of Notes
(which is equivalent to an initial conversion price of
approximately $127.22 per share of Wolfspeed’s common stock).
Conversions of the Notes will be settled in cash, shares of
Wolfspeed’s common stock or a combination thereof, at Wolfspeed’s
election. The initial conversion price represents a conversion
premium of approximately 35% over the last reported sale price of
$94.24 per share of Wolfspeed’s common stock on the New York Stock
Exchange on January 31, 2022.
Prior to the close of business on the day immediately preceding
August 16, 2027, the Notes will be convertible at the option of the
noteholders only upon the satisfaction of specified conditions and
during certain periods. On and after August 16, 2027 until the
close of business on the second scheduled trading day immediately
preceding the maturity date, noteholders may convert their Notes at
their option regardless of these conditions.
Holders may require Wolfspeed to repurchase their Notes upon the
occurrence of a fundamental change (as defined in the indenture
governing the Notes) at a cash purchase price equal to the
principal amount thereof plus accrued and unpaid interest, if
any.
Wolfspeed may not redeem the Notes prior to February 18, 2025.
On or after February 18, 2025 and on or before the 40th scheduled
trading day immediately before the maturity date, Wolfspeed may
redeem for cash all or part of the Notes if the last reported sale
price of Wolfspeed’s common stock has been at least 130% of the
conversion price then in effect for at least 20 trading days
(whether or not consecutive), including the trading day immediately
preceding the date on which Wolfspeed provides a notice of
redemption, during any 30 consecutive trading day period ending on,
and including, the trading day immediately preceding the date on
which Wolfspeed provides notice of redemption. The redemption price
for the Notes will equal the principal amount of the Notes to be
redeemed, plus accrued and unpaid interest, if any.
In connection with the pricing of the Notes, 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 cap price of the capped call transactions will initially be
$212.04 per share, which represents a premium of 125% over the last
reported sale price of $94.24 per share of Wolfspeed’s common stock
on the New York Stock Exchange on January 31, 2022, and is subject
to certain adjustments under the terms of the capped call
transactions.
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.
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. 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.
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/20220131005977/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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