Written by Cláudio Afonso | LinkedIn | X
Electric vehicle maker Nio announced on Friday that it has completed its previously planned buyback of its 0.50% Convertible Senior Notes due 2027. Investors holding $378.3 million worth of these notes opted to sell them back to the company.
After the transaction, $213,000 worth of these notes remain active and will continue under their existing terms, according to Deutsche Bank Trust Company Americas — which acted as the paying agent.
By repurchasing its convertible notes ($378.3 million out of the original amount), the EV maker can lower its outstanding debt.
Convertible and senior convertible notes allow companies to raise funds with lower interest costs than traditional debt. When investors convert their notes into shares, the company’s debt decreases. These notes are also simpler than other financing options, making them attractive for startups.
Nio had announced in late December that it had informed holders of its 0.50% Convertible Senior Notes due 2027 that they have the option to require the company to repurchase their notes for cash on the first day of February.
In the first days of 2024, Nio announced that it had notified holders of its 0.00% convertible senior notes due 2026 of their right to require the company to repurchase all or a portion of the notes for cash on February 1.
A similar announcement was made by Nio in January 2022; however, none of the noteholders exercised their repurchase rights at that time, and no notes were surrendered for repurchase.
“Eeach holder has the right, at the option of such holder, to require the Company to repurchase all of such holder’s Notes or any portion thereof that is an integral multiple of US$1,000 principal amount for cash on February 1, 2025 (the “Repurchase Right”),” Nio said in a statement last month. “The Repurchase Right expires at 5:00 p.m., New York City time, on Thursday, January 30, 2025.”
The post Nio Completes Buyback of Convertible Notes Due 2027 appeared first on EV.