Apollo Backs Wolfspeed with $2B for Expansion, Boosting US Silicon Carbide Supply

A group of lenders led by Apollo Global Management Inc APO provides up to $2 billion to Wolfspeed Inc WOLF to support the latter's expansion in the U.S.

The financing makes $1.25 billion of cash immediately available to the company, with another $750 million for future drawing, Bloomberg cites familiar sources. 

Also Read: Wolfspeed Likely To Divulge Germany EV Plant Details Worth €2B To Bail Out Carmakers From Chip Crisis

Apollo structured the financing as seven-year secured notes with a coupon of 9.875% for redemption after three years. 

Wolfspeed opted for private credit to limit the number of parties accessing its intellectual property and because it could provide additional financing later.

Apollo arranged the deal, which is unrated, and distributed a portion to two other asset managers.

Proceeds support the expansion of two of Wolfspeed's production facilities to supply silicon carbide wafers to automakers like Jaguar Land Rover Automotive Plc.

Wolfspeed's products cater to automotive, renewable energy, defense, and aerospace industries.

In recent years, Apollo has arranged other large private financings for publicly-traded companies.

Price Action: WOLF shares traded higher by 1.04% at $49.95 premarket on the last check Monday.