Apollo leads big debt investment in chip maker Wolfspeed: reports

By Mike Murphy

Apollo Global Management is leading a group of lenders making a debt investment of as much as $2 billion in chip-maker Wolfspeed Inc. to support its U.S. expansion plans, according to reports Sunday.

Bloomberg News reported the deal would make $1.25 billion available immediately to Wolfspeed, with another $750 million that could be drawn later. The financing is structured as seven-year secured notes with a coupon of 9.875%, and can be repaid after three years, Bloomberg said.

The Information reported the deal could be announced in the coming days.

Neither Apollo (APO) nor Wolfspeed immediately responded to MarketWatch's requests for confirmation or comment Sunday.

Wolfspeed focuses on making silicon-carbide chips, which are used in electric vehicles, chargers and other products that seek less power usage in their semiconductors.

Wolfspeed (WOLF), formerly known as Cree, announced plans last September to build a massive silicon carbide manufacturing facility in Chatham County, N.C., near its Durham, N.C., headquarters. Bloomberg reported Sunday that it also plans to expand two production facilities that supply silicon-carbide wafers to auto makers.

Wolfspeed shares have sunk 28% year to date, are are down 31% over the past 12 months, compared to the S&P 500's 13% gain in 2023 and 11% advance over the past year.

-Mike Murphy

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06-25-23 1710ET

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