What Happened: Rivian announced late on Monday that it intends to offer $1.3 billion worth of green convertible senior notes due 2029 in a private placement to qualified institutional buyers. This apart, the company has granted the initial purchasers of the notes an option to buy up to an additional $200 million worth of notes.
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The company said the offering is subject to market and other conditions.
The notes will be senior, unsecured obligations, meaning they would have precedence over other debts in the event of the company going bankrupt and is forced to liquidate, and it is not secured by any collateral.
Terms Of Offering: The green note offering matures on March 15, 2029, and interest is payable semi-annually. The noteholders have the right to convert their notes under certain circumstances and during specified periods. The settlement will be made with cash, Class A common stock of the company, or a combination of both at Rivian’s discretion.
The company expects to use the net proceeds to finance, refinance and make direct investments in one or more new or recently completed eligible green projects. “Eligible green projects are projects that meet specified eligibility criteria, in alignment with the guidelines of the Green Bond Principles, 2021,” it said.
The net proceeds could be temporarily held as cash, or invested in cash equivalents or high-quality marketable securities, Rivian said.
At the end of 2022, the company's cash, cash-equivalents were at $11.57 million, down from $18.13 million at the end of 2021. Including restricted cash, its reserves stood at $12 billion.
Price Action: Rivian closed Monday’s session at $17.13, up 1.24%, but lost 5.78%, to $16.14, in after-hours trading, according to Benzinga Pro data.
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