Rivian seeks to raise $1.3 billion through sale of bonds

Rivian has announced plans to add up to $1.3 billion to its bank accounts through the sale of green convertible senior notes to institutional buyers. The capital raise comes less than one week after the automaker reported a $6.75 billion net loss in 2022.

According to Rivian initial investors will have the option to purchase an additional $200 million of the bonds within 13 days from when the first notes are issued. Rivian said in a statement the notes will be senior, unsecured obligation that will accrue interest which will be payable on March 15, 2029.

At that time investors can decide whether to cash out or convert the bonds into Rivian shares.

The funds raised from the sale of these bonds will be used to “finance, refinance, make direct investment 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 green projects, as described in Rivian’s newly established green financing network,” the automaker said in a press release.

In simpler terms, the money will be used to help launch Rivian’s next generation mass produced R2 platform, a company spokesperson explained to Reuters.

Rivian has been burning through cash at a significant rate as it ramps up production of the R1T, R1S, and EDV (electric delivery van). In the final three months of the year Rivian lost $1.723 billion, bringing their annual net loss to more than $6.7 billion. The automaker ended 2022 with $12.099 billion in cash or cash equivalents.

Shares of Rivian (RIVN) fell nearly 6% in after-hours trading following the bond sale announcement.

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