Rivian Automotive, Inc. (Nasdaq: RIVN) (“Rivian”) today
announced its intention to offer, subject to market and other
conditions, $1,500,000,000 aggregate principal amount of 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”). Rivian also expects to grant 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, will
accrue interest payable semi-annually in arrears and will mature on
October 15, 2030, unless earlier repurchased, redeemed or
converted. Noteholders will have the right to convert their notes
in certain circumstances and during specified periods. 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 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 certain events that constitute a “fundamental change” occur,
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.
The interest rate, initial conversion rate and other terms of
the notes will be determined at the pricing of the offering.
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 expects to
enter 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 are expected to cover, subject to customary
adjustments, the number of shares of Rivian’s common stock that
will initially underlie the notes. If the initial purchasers
exercise their option to purchase additional notes, Rivian expects
to enter into additional capped call transactions with the option
counterparties. Rivian intends to use cash on hand to fund the cost
of entering into the capped call transactions, including any
additional 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 anticipated terms of the notes
being offered, the completion, timing and size of the proposed
offering, the intended use of the proceeds and the anticipated
terms of, 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, including market interest rates, the trading
price and volatility of Rivian’s common stock 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 proposed
offering described in this press release and, if the proposed
offering is consummated, cannot provide any assurances regarding
the final terms of the offering or the notes or 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/20231004663394/en/
Investor Contact ir@rivian.com
Media Contact Harry Porter media@rivian.com
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