Apollo Global and Co-investors Provide Massive Financing to Wolfspeed
A consortium of investors, headed by Apollo Global Management (NYSE: APO), is set to infuse a debt investment in the range of $1 billion to $2 billion into chipmaker Wolfspeed. This strategic move is to facilitate Wolfspeed's U.S. expansion, as reported by various media sources on Sunday.
Financing Details: A Quick Access to Cash and a Future Option
The funding arrangement allows for an immediate cash provision of $1.25 billion to Wolfspeed. Additionally, the chipmaker has the option to draw another $750 million at a later date, as per Bloomberg News.
Investment Terms: Secured Notes with Attractive Coupons
The investment is structured as seven-year secured notes, bearing a robust coupon of 9.875%. The notes have been structured to be repaid after three years.
Anticipation Builds: Deal Announcement in the Pipeline
According to The Information, the public announcement of this substantial deal is expected to transpire in the following days.
Wolfspeed's Growth Plan: Building a Multi-Billion Dollar Factory
Wolfspeed announced plans in September of the previous year to construct a multi-billion dollar factory in Chatham County, North Carolina. This facility will produce the raw materials for chips used in powering a variety of applications, notably electric vehicles, as demand continues to surge.
Awaiting Official Word from Apollo Global and Wolfspeed
As of now, both Apollo Global Management and Wolfspeed have not immediately responded to requests for comment.