Wolfspeed, Inc. closed a financing package that raised $379 million through 3.5 % convertible 1.5‑lien senior secured notes due 2031 and $96.9 million in common stock, for a total of $475.9 million. The notes carry a 3.5 % coupon, are secured by a 1.5‑lien on the company’s assets, and can be converted into shares at an initial price of $20.14 per share, a 20 % premium to the March 18 closing price of $16.78. The equity portion consists of 3,250,030 shares issued at $18.458 per share, accompanied by pre‑funded warrants that allow investors to purchase up to 2 million shares at $18.448 per warrant, a 10 % premium to the March 18 close.
The proceeds will be used to redeem $475.9 million of outstanding senior notes, thereby reducing Wolfspeed’s high‑cost debt and lowering annual interest expense. The transaction also provides working capital to support ongoing operations and capital expenditures, addressing the company’s negative levered free cash flow of $1.02 billion over the last twelve months and a total debt load of $2.07 billion. By replacing expensive debt with lower‑cost notes and fresh equity, Wolfspeed aims to improve its leverage ratios and preserve cash reserves amid continued quarterly cash burn.
Wolfspeed’s Q2 2026 results underscored the need for the raise: revenue fell to $168.5 million, missing the consensus estimate of $199.38 million, while earnings per share were –$6.11 versus an expected –$0.63. The revenue miss was driven by weaker demand in the company’s core silicon‑carbide segments, which are still ramping up production capacity. The earnings miss reflects the combination of lower top line growth, higher operating costs, and the impact of one‑time restructuring charges associated with the company’s ongoing debt reorganization.
The financing signals management’s focus on stabilizing the balance sheet while positioning Wolfspeed for long‑term growth in the silicon‑carbide market. Silicon carbide is a key technology for high‑voltage power electronics in electric vehicles, renewable energy, and data‑center applications, and Wolfspeed has been investing heavily to expand its manufacturing footprint. The capital raise provides the liquidity needed to sustain these investments while mitigating the risk of liquidity shortfalls that could hamper the company’s ability to capture market share in a competitive environment.
Wolfspeed’s debt restructuring began with a joint pre‑packaged Chapter 11 plan in September 2025, which included the issuance of new senior secured and convertible notes. The current financing continues that strategy, following a January 2026 equity issuance to Renesas as part of the broader reorganization. By consolidating debt and injecting equity, Wolfspeed is aligning its capital structure with the growth trajectory of its silicon‑carbide business and reducing exposure to high‑interest debt.
The $476 million raise strengthens Wolfspeed’s financial footing, reduces its debt burden, and provides working capital to support ongoing operations and capital expenditures. The move is expected to improve the company’s leverage ratios and interest coverage, while preserving cash reserves for future investments in silicon‑carbide technology and market expansion.
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