Nio's Shares Fall on Plans to Raise US$1 Billion via Convertible Bonds
20 September 2023 - 1:48PM
Dow Jones News
By Jiahui Huang
Nio's Hong Kong shares fell in early Asia trading on Wednesday,
following an overnight drop in U.S.-listed depository shares after
the Chinese electric-vehicle maker said it would raise US$1 billion
via an issuance of convertible bonds.
Shares traded in Hong Kong and Singapore were down 13% and 11%,
respectively. ADSs closed 17% lower Tuesday in U.S. trade.
Nio is raising $500 million via the issuance of convertible
senior notes due 2029 and $500 million via another tranche due
2030. It said early Wednesday that it would pay coupons of 3.875%
and 4.625%, respectively.
That is a higher rate than what Nio has paid on some past
issuance. It plans to use part of the proceeds to buy and cancel
$500 million in 2026 convertible notes on which it pays coupons of
0.00% and 0.50%.
The company plans to use the remaining proceeds largely for
general corporate needs and to strengthen its balance sheet.
The drop in share price partly reflects the fact that the bonds
can be converted into shares, potentially diluting the holdings of
existing shareholders. Nio said the initial conversion rate of the
new notes represents a premium of about 30% to the last closing
price of its ADSs.
Write to Jiahui Huang at jiahui.huang@wsj.com)
(END) Dow Jones Newswires
September 19, 2023 23:33 ET (03:33 GMT)
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