On October 7, 2026, Wolfspeed, Inc. announced that it has entered into a conditional commitment letter with the U.S. Department of War (DoW), acting through its Office of Strategic Capital (OSC). The agreement contemplates a senior secured delayed draw term loan facility with an aggregate principal amount of up to $1.5 billion. The facility is structured in four tranches, consisting of an initial tranche of $600 million and remaining tranches totaling $900 million, ranging from $200 million to $400 million each.
The financing is contingent upon the negotiation of definitive agreements and the satisfaction of substantial conditions. These conditions include due diligence by the OSC, the negotiation of a Project Undertaking, and the completion of various governmental authorizations and approvals. The DoW has indicated that the interest rate on the facility will be comparable to the U.S. Treasury rate of a similar maturity plus a risk premium, provisionally contemplated to be between 1.25% and 1.75%.
Wolfspeed plans to use the proceeds to refinance outstanding first lien senior secured notes due 2030 and fund expenditures related to a domestic manufacturing project. The project includes the buildout of domestic silicon carbide (SiC) wafer and power device production, the establishment or onshoring of gallium nitride (GaN) production, investment in GaN-on-SiC radio frequency epitaxial wafer technology, and the development of domestic radiation-hardening capabilities.
Subject to the negotiation of definitive agreements, Wolfspeed would be required to issue warrants to the DoW to purchase up to 7.5% of its fully diluted equity. These warrants would be issued pro rata as tranches are funded and would be exercisable for a term of ten years. The execution of the definitive agreements and the consummation of the transaction are subject to numerous closing conditions, including the DoW obtaining necessary appropriations and the Company meeting specific financial covenants.
