Shortly after the notes were priced, Nio purchased about $256 million aggregate principal amount of convertible senior notes due 2026 and about $244 million of convertible senior notes due 2027.
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Nio (NYSE: NIO) completed a $1 billion offering of convertible notes, which the Chinese electric vehicle (EV) maker announced earlier this month.
Nio today announced the closing of an offering of $500 million aggregate principal amount of convertible senior notes due 2029 and $500 million convertible senior notes due 2030, according to a statement.
The notes were sold to persons reasonably believed to be qualified institutional buyers, Nio said.
Nio has granted the initial purchasers of the note offering an option, exercisable within 30 days of the date of issuance of the notes, to purchase up to an additional $75 million aggregate principal amount of the 2029 notes and an additional up to $75 million of the 2030 notes, it said.
The company announced on September 19 that it planned to issue $1 billion of convertible senior notes, with the 2029 notes due to mature on October 15, 2029, and the 2030 notes due to mature on October 15, 2030.
On September 20, Nio announced the pricing of the offering, with $500 million of the 2029 notes bearing interest at 3.875 percent per year and the other $500 million of the 2030 notes bearing interest at 4.625 percent per year.
Shortly after the notes were priced, Nio, through one of the initial purchasers and its affiliates, purchased about $256 million aggregate principal amount of the company’s outstanding 0.00 percent convertible senior notes due 2026 and about $244 million aggregate principal amount of the company’s outstanding 0.50 percent convertible senior notes due 2027 in separate privately negotiated transactions, the company said today.
Nio plans to use the remaining net proceeds from the notes offering primarily to further strengthen its balance sheet position and for general corporate purposes, according to the statement.
Holders of these notes may convert them prior to the maturity date, and upon conversion, Nio will pay or deliver cash, the company’s American Depositary Shares (ADSs), or a combination of cash and ADSs to such converting holders. Each ADS of Nio currently represents one class A ordinary share of the company.
The initial conversion rate for each of these 2029 notes and 2030 notes is 89.9685 ADSs per $1,000 principal amount, which equates to an initial conversion price of about $11.12 per ADS. The conversion price represents a premium of about 30 percent to Nio’s closing price of $8.55 on September 19.
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