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.