Wolfspeed, Inc. announced it has entered into a conditional commitment letter with the U.S. Department of War for a senior secured loan facility of up to $1.5 billion. The financing is intended to support the domestic development and production of silicon carbide (SiC) and gallium nitride (GaN) materials and devices, which are critical for U.S. national security and economic interests. The transaction is not yet finalized and remains subject to substantial due diligence, negotiation of definitive agreements, and numerous closing conditions.
Key Details
- Loan Facility: A senior secured delayed draw term loan facility for up to $1.5 billion with an expected 30-year maturity, provided by the U.S. Department of War's Office of Strategic Capital (OSC).
- Use of Proceeds: Funds are designated for the buildout of domestic SiC wafer and power device production, establishment of GaN production, and development of related technologies.
- Warrants: As a condition, Wolfspeed would be required to issue warrants to the Department of War to purchase up to 7.5% of the company’s fully diluted equity, issuable pro-rata as each loan tranche is funded.
- Key Conditions: The financing is contingent upon significant due diligence, final government approvals, and the company raising at least $750 million in capital from other qualifying sources.