By Scott Murdoch
SYDNEY (Reuters) -Chinese electric vehicle maker Nio Inc said on Wednesday it had raised $1 billion in a two-tranche convertible bond from which it intends to use the proceeds to pay down debt and strengthen its balance sheet.
The company raised $500 million in a six-year put-four convertible bond and the same amount in a seven-year put-five bond.
The bonds will be senior, unsecured notes. The shorter dated bond has a 3.875% interest rate, while the seven-year bond’s rate is 4.625%, Nio said in a Hong Kong Stock Exchange announcement.
Nio’s Hong Kong shares dropped 12% in morning trade on Wednesday after the final pricing decision was set.
“The company plans to use a portion of the net proceeds from the notes offering to repurchase a portion of the existing debt securities … and the remainder mainly to further strengthen its balance sheet position as well as for general corporate purposes,” the company said.
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Nio said in late August it planned to launch its first self-development mobile telephone later this month to improve the appeal of its cars with better software and connectivity.
Nio posted a net loss of 6.12 billion yuan ($839.51 million) in the second quarter, versus a loss of 2.75 billion yuan in the corresponding period a year earlier.
(Reporting by Scott Murdoch in Sydney; Editing by Michael Perry and Jacqueline Wong)