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HomeFinanceApollo leads big debt investment in chip maker Wolfspeed: reports

Apollo leads big debt investment in chip maker Wolfspeed: reports

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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,
-2.50%

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,
-4.87%
,
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
SPX,
-0.77%

13% gain in 2023 and 11% advance over the past year.

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