Wolfspeed, a semiconductor company intending to expand its US operations, is set to receive up to $2 billion in private funding from Apollo Global Management, which is leading a consortium of lenders.

The deal provides Durham, NC-based Wolfspeed with an immediate cash infusion of $1.25 billion, with an additional $750 million accessible at a later stage. The arrangement, structured as seven-year secured notes with a 9.875% coupon, permits repayment after three years.

“The group’s commitment to Wolfspeed further validates the importance of silicon carbide to the global energy transition,” said Gregg Lowe, Wolfspeed president and CEO. “

Wolfspeed will concentrate on developing two of its manufacturing plants and ultimately increasing productivity. The plants oversee the supply of silicon carbide wafers to automakers such as Jaguar Land Rover Automotive Plc.

The financing highlights how, even for established businesses, the private credit sector is enticing for finance. Wolfspeed chose this route to minimize the number of businesses who have access to its intellectual property and to allow for future financing from private lenders.

Apollo is not a newcomer to the world of private finance for publicly traded companies. It provided a $1.8 billion loan to New Media Investment Group Inc. in support of its acquisition of Gannett Co. In addition, Apollo made a $1 billion loan to Bombardier Inc.