According to an insider source cited in the report, NIO aims to set the coupon rate for these notes at a maximum of 4.75 percent.
NIO's plan involves the issuance of $500 million in convertible senior notes maturing in 2029, alongside an equivalent amount of notes maturing in 2030, according to their official announcement. Furthermore, initial purchasers will have the option to acquire an additional $75 million of each type of note within 30 days from the issuance date.
The 2029 notes are expected to offer a coupon rate ranging between 3.5 and 4.0 percent, coupled with a conversion premium ranging from 27.5 to 32.5 percent above the share price. Meanwhile, the 2030 notes are targeting a coupon rate between 4.25 and 4.75 percent, along with a conversion premium within the same range, according to the aforementioned source.
Leading financial institutions, including Goldman Sachs, JPMorgan Chase, Morgan Stanley, and CICC, are named as the lead underwriters for this offering.
As part of the convertible notes' terms, holders will retain the option to convert them at any point before the maturity date. Upon conversion, NIO will provide converting holders with either cash, American Depositary Shares (ADSs), or a combination of both, as detailed in NIO's earlier announcement today.
NIO intends to allocate a portion of the net proceeds generated from this notes offering to repurchasing specific existing debt securities. The remainder of the funds will primarily be used to bolster the company's financial position and for general corporate purposes, as stated by NIO in its official announcement.