Wolfspeed talks $1.3 billion seven-year convertible notes to yield 1.625%-2.125%, up 32.5%-37.5%

By Abigail W. Adams

Portland, Me., Nov. 16 – Wolfspeed Inc. plans to price $1.3 billion of seven-year convertible notes after the market close on Wednesday with price talk for a coupon of 1.625% to 2.125% and an initial conversion premium of 32.5% to 37.5%, according to a market source.

Morgan Stanley & Co. LLC (lead left) and Wells Fargo Securities LLC are bookrunners for the Rule 144A offering, which carries a greenshoe of $200 million.

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

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

BorgWarner, a Durham, N.C.-based automotive supplier, announced in a separate press release a strategic partnership with Wolfspeed where it would invest $500 million in the financing transaction entitling it to purchase $650 million of devices annually.

Proceeds will be used to cover the cost of the call spread and for general corporate purposes.

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

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