By Abigail W. Adams
Portland, Me., Feb. 1 – Wolfspeed Inc. priced an upsized $650 million of six-year convertible notes after the market close on Monday at par at the rich end of talk with a coupon of 0.25% and an initial conversion premium of 35%, according to a market source and a company news release.
Price talk was for a coupon of 0.25% to 0.75% and an initial conversion premium of 30% to 35%.
Morgan Stanley & Co. LLC, Wells Fargo Securities LLC, J.P. Morgan Securities LLC, BofA Securities Inc. and Citigroup Global Markets Inc. were bookrunners for the Rule 144A offering, which carries an upsized greenshoe of $100 million.
The initial size of the offering was $500 million with a greenshoe of $75 million.
The notes are non-callable until Feb. 18, 2025 and then subject to a 130% hurdle.
They are putable upon a fundamental change. There is 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 entered into capped call transactions with a cap price of $212.04, which represents a premium of 125% over the last reported sales price of stock.
Net proceeds are expected to be $634.6 million or will be $732.3 million if the greenshoe is exercised in full.
Approximately $93.7 million of net proceeds will be used to fund the call spread with the remaining amount to be used for general corporate purposes.
Wolfspeed is a Durham, N.C.-based wide bandgap semiconductor developer.
| Issuer: | Wolfspeed Inc.
|
| Amount: | $650 million
|
| Greenshoe: | $100 million
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| Issue: | Convertible senior notes
|
| Maturity: | Feb. 15, 2028
|
| Bookrunners: | Morgan Stanley & Co. LLC, Wells Fargo Securities LLC, J.P. Morgan Securities LLC, BofA Securities Inc. and Citigroup Global Markets Inc.
|
| Coupon: | 0.25%
|
| Price: | Par
|
| Yield: | 0.25%
|
| Conversion premium: | 35%
|
| Conversion price: | $127.22
|
| Conversion rate: | 35%
|
| Call options: | Non-callable until Feb. 18, 2025 and then subject to a 130% hurdle
|
| Put options: | Upon a fundamental change
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| Pricing date: | Jan. 31
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| Settlement date: | Feb. 3
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| Distribution: | Rule 144A
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| Talk: | Coupon of 0.25% to 0.75% and initial conversion premium of 30% to 35%
|
| Stock symbol: | NYSE: WOLF
|
| Stock price: | $94.24 at market close Jan. 31
|
| Market capitalization: | $11.65 billion
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