By Abigail W. Adams
Portland, Me., Nov. 17 – Wolfspeed Inc. priced an upsized $1.525 billion of seven-year convertible notes after the market close on Wednesday at par at the midpoint of talk with a coupon of 1.875% and an initial conversion premium of 35%, according to a market source and a company news release.
Price talk was for a coupon of 1.625% to 2.125% and an initial conversion premium of 32.5% to 37.5%.
Morgan Stanley & Co. LLC (lead left) and Wells Fargo Securities LLC are bookrunners for the Rule 144A offering, which carries an upsized greenshoe of $225 million.
The initial size of the offering was $1.3 billion with a greenshoe of $200 million.
The notes are non-callable until Dec. 4, 2026 and then subject to a 130% hurdle.
In connection with the offering, the company entered into capped call transactions with a cap price of $202.5380, which represents a premium of 130% over the stock reference price.
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.
Net proceeds are expected to be $1,497,500,000 or will be $1,718,600,000 if the greenshoe is exercised in full.
Approximately $238.7 million will be used to cover the cost of the call spread with the remaining amount to be used for general corporate purposes.
Wolfspeed is a Durham, N.C.-based bandgap semiconductor developer.
| Issuer: | Wolfspeed Inc.
|
| Amount: | $1.525 billion
|
| Greenshoe: | $225 million
|
| Issue: | Convertible senior notes
|
| Maturity: | Dec. 1, 2029
|
| Bookrunners: | Morgan Stanley & Co. LLC (lead left) and Wells Fargo Securities LLC
|
| Coupon: | 1.875%
|
| Price: | Par
|
| Yield: | 1.875%
|
| Conversion premium: | 35%
|
| Conversion price: | $118.88 shares
|
| Conversion rate: | 8.4118
|
| Call options: | Non-callable until Dec. 4, 2026 and then subject to a 130% hurdle
|
| Put options: | Upon a fundamental change
|
| Pricing date: | Nov. 16
|
| Settlement date: | Nov. 21
|
| Distribution: | Rule 144A
|
| Talk: | Coupon of 1.625% to 2.125% and initial conversion premium of 32.5% to 37.5%
|
| Stock symbol: | NYSE: WOLF
|
| Stock price: | $88.06 at market close Nov. 16
|
| Market capitalization: | $10.94 billion
|
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