Nio prices $ 1.3 billion in convertible notes, half of which pays no interest

Nio Inc. NIO,
-1.05%
on Wednesday announced the price of $ 1.3 billion in convertible notes, including $ 650 million in notes due in 2026 and $ 650 million in notes due in 2027. The Chinese-based electric vehicle manufacturer said the 2026 senior unsecured notes will not pay interest and the principal will not accrue. Nio’s shares fell 0.3% in pre-market trading. The 2027 senior notes will pay interest at a rate of 0.50% per year. Holders can convert 2026 notes at any time on or after August 1, 2025 and 2027 notes can be converted on or after August 1, 2026, into cash, American depositary shares (ADS) or a combination of cash and ADS. The initial conversion rate for banknotes for ADS is the equivalent of $ 93.04 per ADS, which is 50% above Tuesday’s closing price of $ 62.04. Nio’s shares were up 187.0% in the last three months through Tuesday, while iShares MSCI China ETF MCHI,
+ 1.16%
gained 8.0% and the S&P 500 SPX,
+ 0.04%
advanced 8.2%.