This is NIO's latest move after raising RMB 1 billion in an ABS issue last year, meaning it has established direct access to financing in both China's exchange and interbank markets.
(Image credit: CnEVPost)
Despite not being listed on the Chinese mainland's capital markets, NIO has begun to use them to gain capital ammunition.
NIO announced today that its financial leasing subsidiary has successfully issued RMB 1.03 billion ($163 million) in ABNs (Asset-backed Medium-term Notes) in China's interbank market, the first of its kind in the country's new energy vehicle (NEV) sector.
This is the second time the company has obtained financing in the Chinese capital markets.
On October 29 last year, NIO announced that the financial leasing subsidiary, NIO Financial Leasing Co Ltd, successfully issued Asset-backed securities (ABS) for NEV leasing on the Shanghai Stock Exchange, marking the EV maker's debut in the Chinese capital markets.
It is also the first ABS for carbon-neutral projects in China with a total size of RMB 1.03 billion and a maturity date of 2023.
In China, the issuance process for ABS is similar to that for ABNs, except that the former is issued through the stock exchange and the latter is issued in the interbank market.
NIO's latest ABN issuance is divided into two tranches like the previously issued ABS. Among them, the RMB 800 million senior A-rated ABN has a debt rating of AAA and a coupon rate of 2.89 percent. The RMB 47 million senior B-rated ABN has a debt rating of AA+ and a coupon rate of 3.50 percent.
For issuers of such assets, lower interest rates mean lower costs. The coupon rates of NIO's ABS issued last year were 3.64 percent and 4.20 percent respectively.
The funds raised by NIO through the ABN offering will be used entirely for its smart electric vehicle business, it said, adding that its finance lease is primarily for providing finance lease solutions to customers who purchase NIO vehicles.
The offering was actively subscribed by investors, highlighting the high level of capital market recognition and support for the NIO brand, the company said. The maturity dates of these ABNs are March 26, 2024.
The project is another attempt by NIO to raise funds in the interbank market following the issuance of its first carbon-neutral NEV leasing ABS on the Shanghai Stock Exchange on October 29, 2021, marking the completion of NIO's establishment of direct financing channels in the exchange market and interbank market, it said.
This provides a strong guarantee for the company to further promote vehicle sales and drive green and low-carbon development, it said.
Notably, on February 28, NIO announced it had applied to list its issued Class A ordinary shares in Hong Kong by way of introduction.
These shares will be listed on the main board of the Hong Kong Stock Exchange as a secondary listing and they are expected to commence trading on Thursday, March 10, 2022, subject to final approval.
Both XPeng Motors and Li Auto have already been listed in Hong Kong last year by way of dual primary listings, following a complex process and both issuing new shares. NIO has adopted a different approach to its secondary listing and does not involve any new issue of shares.