Nio’s Hong Kong shares
fell in early Asia trading on Wednesday, following an overnight drop in U.S.-listed depository shares after the Chinese electric-vehicle maker said it would raise US$1 billion via an issuance of convertible bonds.
Shares traded in Hong Kong and Singapore
were down 13% and 11%, respectively. ADSs
closed 17% lower Tuesday in U.S. trade.
Nio is raising $500 million via the issuance of convertible senior notes due 2029 and $500 million via another tranche due 2030. It said early Wednesday that it would pay coupons of 3.875% and 4.625%, respectively.
That is a higher rate than what Nio has paid on some past issuance. It plans to use part of the proceeds to buy and cancel $500 million in 2026 convertible notes on which it pays coupons of 0.00% and 0.50%.
The company plans to use the remaining proceeds largely for general corporate needs and to strengthen its balance sheet.
The drop in share price partly reflects the fact that the bonds can be converted into shares, potentially diluting the holdings of existing shareholders. Nio said the initial conversion rate of the new notes represents a premium of about 30% to the last closing price of its ADSs.