Wolfspeed Inc. (NYSE: WOLF) closed a private placement of convertible notes and equity that raised $475.9 million in gross proceeds, which the company used to redeem existing senior secured notes.

The silicon carbide technology company issued $379 million of 3.5% convertible senior secured notes due 2031 and approximately $96.9 million in common stock and pre-funded warrants. The equity was priced at a 10% premium to the March 18 closing price.

The transaction reduced Wolfspeed's senior secured note balance by approximately 43% and total debt by about $97 million. The company expects the refinancing to lower annual interest expense by approximately $62 million.

T. Rowe Price Associates Inc. accounts, Fidelity Management & Research Company, and other institutional investors participated in the private placement. Goldman Sachs & Co. LLC, Wells Fargo Securities LLC, and William Blair & Company LLC served as placement agents.

The convertible notes bear 3.5% annual interest, payable semi-annually, and mature March 15, 2031. The company may settle conversions in cash, stock, or a combination at its discretion.

The company issued 3.25 million common shares at $18.458 per share and pre-funded warrants for 2 million shares at $18.448 per warrant. Each warrant allows purchase of one share at $0.01 per share.

"We believe this refinancing reflects strong confidence in Wolfspeed's technology leadership and the long-term growth potential for silicon carbide," said Chief Financial Officer Gregor van Issum.

The securities were sold to qualified institutional buyers under Securities Act exemptions and have not been registered for public sale.