Nio Reportedly Raises $163M Through Debt Offering In China: What Investors Need To Know

Nio, Inc. NIO recently announced approval for a secondary listing in Hong Kong without issuing any shares.

After shunning an opportunity to raise fresh capital, it now appears the company has tapped the debt market in China.

What Happened: Nio's financial leasing subsidiary has raised 1.03 billion yuan ($163 million) through the issuance of asset-backed medium-term notes in China's interbank market, CnEVPost reported, citing the company.

This follows a 1-billion-yuan asset-backed securities offering done in October 2021, the report said. Nio is not listed in the Chinese stock markets and its proposed secondary listing in Hong Kong does not give the company access to the "Connect Program."

The offering is reportedly divided into two tranches — a 800-million-yuan senior A-rated ABN with a debt rating of AAA and 2.89% coupon rate, and a 47-million-yuan senior B-rated ABN with a debt rating of AA+ and 3.5% coupon rate. These ABNs have maturity dates of March 26, 2024, the report said.

Citing the company, the report said the offering was actively subscribed.

Nio reportedly said it expects the proceeds from the ABN offering for its EV business, primarily to provide lease financing options for purchasers of its vehicles.

Why It's Important: Nio had a tough 2021, with its fundamental performance getting hit from component shortages. Its stock has also come under a steep sell-off amid the rough patch.

The outlook for 2022 is promising: the company has lined up three products for release this year that are expected to push up volumes significantly.

The leasing option that Nio has planned could help the company leverage its product offerings given that most of its EVs are positioned as premium products.

At last check, Nio shares were slipping 7.44% to $20.15.

Market News and Data brought to you by Benzinga APIs

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