Wolfspeed said it closed a refinancing and equity raise that brought in about $475.9 million in gross proceeds and was used to retire roughly $475.9 million of its outstanding senior secured notes due 2030.
The company issued $379 million of new 3.5% convertible 1.5 lien senior secured notes due 2031, along with about $96.9 million of common stock and pre-funded warrants. The shares were priced at $18.458 each, a 10% premium to the March 18 closing price, while the pre-funded warrants were priced at $18.448 apiece.
In total, Wolfspeed said the transaction reduces its senior secured notes balance by about 43% and cuts total debt by approximately $97 million. It also expects annual interest expense to fall by about $62 million.
The equity portion included 3,250,030 shares of common stock and pre-funded warrants to buy up to 2,000,000 additional shares. The pre-funded warrants carry an exercise price of $0.01 per share.
The new notes pay 3.5% annual interest, with semiannual payments on March 15 and September 15, and mature on March 15, 2031.
Wolfspeed said the financing was backed by investors including accounts advised by T. Rowe Price Associates and Fidelity Management & Research Company, along with other new and existing institutional investors. The market has reacted to these announcements by moving the company's shares 2.16% to a price of $20.35. If you want to know more, read the company's complete 8-K report here.
