Rivian Automotive, Inc. (Nasdaq: RIVN) (“Rivian”) today
announced the pricing of its offering of $1,500,000,000 aggregate
principal amount of 3.625% green convertible senior notes due 2030
(the “notes”) in a private offering to qualified institutional
buyers pursuant to Rule 144A under the Securities Act of 1933, as
amended (the “Securities Act”). The issuance and sale of the notes
are scheduled to settle on October 10, 2023, subject to customary
closing conditions. Rivian also granted the initial purchasers of
the notes an option to purchase, for settlement within a period of
13 days from, and including, the date the notes are first issued,
up to an additional $225,000,000 principal amount of notes.
The notes will be senior, unsecured obligations of Rivian and
will accrue interest at a rate of 3.625% per annum, payable
semi-annually in arrears on April 15 and October 15 of each year,
beginning on April 15, 2024. The notes will mature on October 15,
2030, unless earlier repurchased, redeemed or converted. Before
July 15, 2030, noteholders will have the right to convert their
notes only upon the occurrence of certain events. From and after
July 15, 2030, noteholders may convert their notes at any time at
their election until the close of business on the second scheduled
trading day immediately before the maturity date. Rivian will
settle conversions by paying or delivering, as applicable, cash,
shares of its Class A common stock (the “common stock”) or a
combination of cash and shares of its common stock, at Rivian’s
election. The initial conversion rate is 42.9290 shares of common
stock per $1,000 principal amount of notes, which represents an
initial conversion price of approximately $23.29 per share of
common stock. The initial conversion price represents a premium of
approximately 27.5% over the last reported sale price of $18.27 per
share of Rivian’s common stock on October 5, 2023. The conversion
rate and conversion price will be subject to adjustment upon the
occurrence of certain events.
The notes will be redeemable, in whole or in part (subject to
certain limitations), for cash at Rivian’s option at any time, and
from time to time, on or after October 20, 2027 and on or before
the 20th scheduled trading day immediately before the maturity
date, but only if the last reported sale price per share of
Rivian’s common stock exceeds 130% of the conversion price for a
specified period of time. The redemption price will be equal to the
principal amount of the notes to be redeemed, plus accrued and
unpaid interest, if any, to, but excluding, the redemption
date.
If a “fundamental change” (as defined in the indenture that will
govern the notes) occurs, then, subject to limited exceptions,
noteholders may require Rivian to repurchase their notes for cash.
The repurchase price will be equal to the principal amount of the
notes to be repurchased, plus accrued and unpaid interest, if any,
to, but excluding, the applicable repurchase date.
Rivian estimates that the net proceeds from this offering will
be approximately $1,486.3 million (or approximately $1,709.3
million if the initial purchasers fully exercise their option to
purchase additional notes), after deducting the initial purchasers’
discounts and commissions and estimated offering expenses. Rivian
intends to use approximately $93.8 million of cash on hand to fund
the cost of the capped call transactions described below that it
entered into in connection with the pricing of the notes. Rivian
intends to allocate an amount equal to the net proceeds from the
offering to finance, refinance, make direct investments in, in
whole or in part, one or more new or recently completed (within the
24 months prior to the issue date of the notes), current and/or
future eligible projects (such projects, “Eligible Green
Projects”), in alignment with the guidelines of the Green Bond
Principles, 2021. Eligible Green Projects include expenditures
relating to, investments in, financings of and/or acquisitions of
one or more of the following: (i) clean transportation, (ii)
renewable energy, (iii) circular economy, (iv) energy efficiency
and (v) pollution prevention and control. Pending full allocation
of an amount equal to the net proceeds from the offering to
Eligible Green Projects, Rivian may temporarily invest the
remainder of the net proceeds from the offering in cash, cash
equivalents, and/or high-quality marketable securities, and will
not knowingly invest in operations that result in an overall net
increase in greenhouse gas emissions.
In connection with the pricing of the notes, Rivian entered into
privately negotiated capped call transactions with one or more of
the initial purchasers or their affiliates and/or other financial
institutions (the “option counterparties”). The capped call
transactions cover, subject to customary adjustments, the number of
shares of Rivian’s common stock underlying the notes. If the
initial purchasers exercise their option to purchase additional
notes, Rivian expects to use cash on hand to enter into additional
capped call transactions with the option counterparties.
The cap price of the capped call transactions will initially be
approximately $31.06 per share, which represents a premium of 70%
over the last reported sale price of Rivian’s common stock of
$18.27 per share on October 5, 2023, and is subject to certain
adjustments under the terms of the capped call transactions.
The capped call transactions are expected generally to reduce
the potential dilution to Rivian’s common stock upon any conversion
of the notes and/or at Rivian’s election (subject to certain
conditions) offset any potential cash payments Rivian is required
to make in excess of the principal amount of converted notes, as
the case may be, upon conversion of the notes. If, however, the
market price per share of Rivian’s common stock, as measured under
the terms of the capped call transactions, exceeds the cap price of
the capped call transactions, there would nevertheless be dilution
and/or there would not be an offset of such potential cash
payments, in each case, to the extent that such market price
exceeds the cap price of the capped call transactions.
In connection with establishing their initial hedges of the
capped call transactions, the option counterparties or their
respective affiliates expect to enter into various derivative
transactions with respect to Rivian’s common stock and/or purchase
shares of Rivian’s common stock concurrently with or shortly after
the pricing of the notes. This activity could increase (or reduce
the size of any decrease in) the market price of Rivian’s common
stock or the notes at that time.
In addition, the option counterparties or their respective
affiliates may modify their hedge positions by entering into or
unwinding various derivatives with respect to Rivian’s common stock
and/or purchasing or selling Rivian’s common stock or other
securities in secondary market transactions following the pricing
of the notes and prior to the maturity of the notes (and are likely
to do so on each exercise date of the capped call transactions,
which are expected to occur during the 20 trading day period
beginning on the 21st scheduled trading day prior to the maturity
date of the notes, or following our election to terminate any
portion of the capped call transactions in connection with any
repurchase, redemption, exchange or early conversion of the notes).
This activity could also cause or avoid an increase or decrease in
the market price of Rivian’s common stock or the notes, which could
affect the ability to convert the notes, and, to the extent the
activity occurs during any observation period related to a
conversion of notes, it could affect the number of shares and value
of the consideration that noteholders will receive upon conversion
of the notes.
The offer and sale of the notes and any shares of common stock
issuable upon conversion of the notes have not been, and will not
be, registered under the Securities Act or any other securities
laws, and the notes and any such shares cannot be offered or sold
except pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act and
any other applicable securities laws. This press release does not
constitute an offer to sell, or the solicitation of an offer to
buy, the notes or any shares of common stock issuable upon
conversion of the notes, nor will there be any sale of the notes or
any such shares, in any state or other jurisdiction in which such
offer, sale or solicitation would be unlawful.
About Rivian
Rivian exists to create products and services that help our
planet transition to carbon neutral energy and transportation.
Rivian designs, develops, and manufactures category-defining
electric vehicles and accessories and sells them directly to
customers in the consumer and commercial markets. Rivian
complements its vehicles with a full suite of proprietary,
value-added services that address the entire lifecycle of the
vehicle and deepen its customer relationships.
Forward-Looking Statements
This press release includes forward-looking statements,
including statements regarding the completion of the offering and
the expected amount and intended use of the net proceeds and the
effects of entering into the capped call transactions described
above. Forward-looking statements represent Rivian’s current
expectations regarding future events and are subject to known and
unknown risks and uncertainties that could cause actual results to
differ materially from those implied by the forward-looking
statements. Among those risks and uncertainties are market
conditions, the satisfaction of the closing conditions related to
the offering and risks relating to Rivian’s business, including
those described in periodic reports that Rivian files from time to
time with the Securities and Exchange Commission. Rivian may not
consummate the offering described in this press release and, if the
offering is consummated, cannot provide any assurances regarding
its ability to effectively apply the net proceeds as described
above. The forward-looking statements included in this press
release speak only as of the date of this press release, and Rivian
does not undertake to update the statements included in this press
release for subsequent developments, except as may be required by
law.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231005782001/en/
Investor Contact ir@rivian.com
Media Contact Harry Porter media@rivian.com
Rivian Automotive (NASDAQ:RIVN)
Historical Stock Chart
From Jun 2024 to Jul 2024
Rivian Automotive (NASDAQ:RIVN)
Historical Stock Chart
From Jul 2023 to Jul 2024