Nio offers $1 billion in convertible bonds and ADRs drop


  • Nio said it would offer $1 billion in convertible bonds maturing in 2029 and 2030.
  • The electric vehicle maker said the cash would be used to pay down debt , strengthen its balance sheet and make general corporate purchases.
  • The electric vehicle maker said it would use the cash to pay down debt, strengthen its balance sheet and make general business purchases. li>
  • Nio's second-quarter loss was more than double what it was in 2022, and sales fell.

Nio's (NIO) American depositary receipts (ADRs) sank and were down nearly 8% as of midday Eastern time Tuesday after the Chinese electric vehicle (EV) maker announced the sale of $1 billion in convertible bonds as it struggles to increase revenue.

Nio said half of the notes would be due in 2029 and the other half in 2030. It added that it plans to use the proceeds to repurchase some of the existing debt securities, the rest being intended to “further strengthen its balance sheet position as well as for general corporate purposes.”

The move comes after the company reported a net loss of 6.06 billion Chinese yuan ($835 million) in the second quarter, 113% higher than the previous year. This is the third consecutive quarter where its losses have doubled. Vehicle sales were down 24.9% and total revenue was down 14.8%.

Two more electric vehicle companies , truck manufacturer Nikola (NKLA) and SUV maker Fisker (FSR) also issued convertible bonds this summer and posted losses in the second quarter.

Nio ADRs reached a record level. shares of Nikola and Fisker also fell.


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