Nio Offers $1B in Convertible Bonds, and ADRs Drop

By
Bill McColl
Bill McColl
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Bill McColl has 25+ years of experience as a senior producer and writer for TV, radio, and digital media leading teams of anchors, reporters, and editors in creating news broadcasts, covering some of the most notable news stories of the time.

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Published September 19, 2023
Nio store in Shanghai, China

NurPhoto / Contributor / Getty Images

Key Takeaways

  • Nio announced it will offer $1 billion in convertible bonds to come due in 2029 and 2030.
  • The EV maker said the cash would be used to pay down debt, strengthen its balance sheet, and general corporate purchases.
  • Nio's second quarter loss was more than double what it was in 2022, and sales tumbled.

American depositary receipts (ADRs) of Nio (NIO) sank and were nearly 8% lower as of noon Eastern on Tuesday after the Chinese electric vehicle (EV) maker announced the sale of $1 billion in convertible bonds as it struggles to boost revenue.

Nio indicated 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 a portion of existing debt securities, with the remainder to “further strengthen its balance sheet position as well as for general corporate purposes.”

The move comes after the company reported a second quarter net loss of 6.06 billion Chinese yuan ($835 million), 113% greater than the year before. It was the third-consecutive quarter that its losses doubled. Vehicle sales declined 24.9%, and total revenue dipped 14.8%.

Two other EV companies, truck maker Nikola (NKLA) and SUV manufacturer Fisker (FSR), also made convertible bond offerings this summer and reported losses in the second quarter. 

Nio ADRs hit an all-time high in February 2021, but have since lost about 85% of their value, and Tuesday's losses sent them into negative territory for 2023. Shares of Nikola and Fisker both dropped as well.?

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  1. Nio. "NIO Inc. Announces Proposed Offering of US$1 Billion Convertible Senior Notes."

  2. Nio. "NIO Inc. Reports Unaudited Second Quarter 2023 Financial Results."

  3. Fisker. “Fisker Announces $340 Million Convertible Notes Offering, Potential to Increase to $680 Million.”

  4. Nikola. “Nikola Announces $200 Million Convertible Senior Notes Investment.”

  5. PR Newswire. “Nikola Corporation Reports Second Quarter 2023 Results.”

  6. Fisker. “Fisker Inc. Announces Second Quarter 2023 Financial Results.”

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