Nio (NIO:US), the Chinese electric vehicle (EV) maker, experienced a 17% decline on Tuesday after announcing a proposed offering of $500 million in convertible senior notes due in 2029 and another $500 million in convertible senior notes due in 2030.
This way, the EV maker is trying to raise $1 billion. As part of the offering, the company plans to provide initial purchasers with an option to acquire an additional $75 million in aggregate principal amount of the 2029 notes and up to an additional $75 million in aggregate principal amount of the 2030 notes.
Furthermore, noteholders will have the option to require the company to repurchase all or a portion of the notes for cash on October 15, 2027, in the case of the 2029 notes, or October 15, 2028, for the 2030 notes.
The repurchase price will be set at 100% of the principal amount of the notes, along with any accrued and unpaid interest.
On a more positive note, Nio stock gapped modestly higher on Wednesday as investors likely saw a Tuesday drop as a buying opportunity. The stock is up 7.1% year-to-date, despite falling aggressively since August and erasing almost all YTD gains.