NIO announces proposed $1.3B senior notes offering

Chinese electric-vehicle maker NIO Ltd. on Jan. 11 disclosed a proposed offering of $1.3 billion of senior convertible notes.

The offering consists of $650 million of convertible notes due 2026 and $650 million of convertible notes due 2027.

NIO plans to grant the initial purchasers of the notes a 30-day option to buy up to an additional $100 million in each of the 2026 notes and 2027 notes.

The Shanghai-based company said it intends to use net proceeds from the offering for general corporate purposes and to further bolster its cash and balance sheet positions.

The 2026 notes and the 2027 notes will mature on Feb. 1, 2026, and Feb. 1, 2027, respectively, unless repurchased, redeemed or converted.

After Aug. 1, 2025, and Aug. 1, 2026, the holders of the 2026 notes and the 2027 notes may convert their notes at any time until the close of business on the second scheduled trading day immediately preceding the relevant maturity date. NIO will pay or deliver such converting holders cash or the company's American depositary shares or a combination of both. Each of the company's ADS represents 1 class A ordinary share of NIO.

Holders of the notes may require NIO to repurchase all or part of their notes for cash on Feb. 1, 2024, in the case of the 2026 notes, and Feb. 1, 2025, in the case of the 2027 notes, or in the event of certain fundamental changes.

The automaker expects to enter into one or more separate and individually privately negotiated agreements with one or more holders of its outstanding 4.50% convertible senior notes due 2024 to exchange a portion of the 2024 notes for ADSs.

In December 2020, NIO completed its offering of 68,000,000 ADSs, the proceeds of which it intends to use for research and development of new products and autonomous driving technologies and other purposes.