Wolfspeed talks $500 million six-year convertible notes to yield 0.25%-0.75%, up 30%-35%

By Abigail W. Adams

Portland, Me., Jan. 31 – Wolfspeed Inc. plans to price $500 million of six-year convertible notes after the market close on Monday with price talk for a coupon of 0.25% to 0.75% and an initial conversion premium of 30% to 35%, according to a market source.

Morgan Stanley & Co. LLC, Wells Fargo Securities LLC, J.P. Morgan Securities LLC, BofA Securities Inc. and Citigroup Global Markets Inc. are bookrunners for the Rule 144A offering, which carries a greenshoe of $75 million.

The notes are non-callable for three years and then subject to a 130% hurdle.

There is takeover and dividend protection.

The convertibles will be settled in cash, shares or a combination of both at the company’s option.

In connection with the offering, the company will enter into capped call transactions.

Proceeds will be used to fund the call spread and for general corporate purposes.

Wolfspeed is a Durham, N.C.-based wide bandgap semiconductor developer.

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