Wolfspeed entered into Restructuring Support Agreement with key lenders

Wolfspeed (WOLF) announced that, as part of its efforts to proactively strengthen its capital structure, it entered into a Restructuring Support Agreement with key lenders, including holders of more than 97% of its senior secured notes, Renesas Electronics Corporation’s wholly owned U.S. subsidiary and convertible debtholders holding more than 67% of the outstanding convertible notes. The transactions envisioned by the RSA are expected to reduce the Company’s overall debt by approximately 70%, representing a reduction of approximately $4.6 billion, and reduce the Company’s annual total cash interest payments by approximately 60%. Key terms of the RSA are as follows: Pursuant to the transactions contemplated by the RSA, the Company will receive $275 million of new financing in the form of second lien convertible notes, fully backstopped by certain of its existing convertible debtholders. The RSA contemplates a paydown of its senior secured notes of $250 million at a rate of 109.875%, with certain modifications to reduce go-forward cash interest and minimum liquidity requirements. Pursuant to the transactions, existing equity will be cancelled, and the existing equity holders will receive their pro rata share of 3% or 5% of new common equity, subject to dilution from other equity issuances and potential reduction from certain events.