NIO convertibles extend rally; PG&E secured convertible notes higher; secondary volume up

By Cristal Cody

Tupelo, Miss., Dec. 19 – NIO Inc.’s convertible notes continued to climb Tuesday after picking up around 1.5 points to more than 2.5 points in early trading following gains of more than 5 points Monday on the company’s announcement of a $2.2 billion cash investment.

“It came from the depths of the abyss – so it’s doing pretty well at 101 and some change,” a source said earlier Tuesday. “The stock came back; the bonds came back.”

NIO’s 4.625% convertible notes due 2030 went out around 4.25 points higher on $10 million of secondary supply.

The bonds climbed more than 5 points on $14 million of paper changing hands Monday.

Secondary action was busier Tuesday with more than $830 million of convertible bonds traded by the close, up from around $701 million of volume over Monday’s session.

Stocks were all moving higher as the session got underway and finished stronger.

The S&P 500 index closed up 0.59%, the Dow Jones industrial average improved 0.68%, the Nasdaq rose 0.66% and the Russell 2000 index increased 1.94%.

Also Tuesday, PG&E Corp.’s 4.25% secured convertible notes due 2027 had strong secondary interest with $17 million of paper traded and the bonds up more than 0.5 point.

“PG&E came out of the gate pretty strongly at issuance, and it’s maintained it,” a source said.

NIO moves up

By the end of the session, NIO’s 4.625% convertible notes due 2030 had added around 4.25 points to head out better than 103.25 versus an equity price of $8.86, a source said.

Trading totaled over $10 million in the issue.

Over the morning, the issue had climbed over 2.5 points to better than 101.5 versus an equity price of $8.73 on $7 million-plus of supply.

The bonds added more than 5 points on $14 million of paper changing hands Monday.

NIO’s 3.875% convertible notes due 2029 also bucked up to a 101-handle over the morning Tuesday after picking up over 1.5 points in lighter supply totaling $3 million.

The issue went out Monday more than 6 points better on nearly $23 million of paper traded.

NIO reported Monday that it entered into a share subscription agreement with CYVN Holdings LLC through its Abu Dhabi-based investment vehicle CYVN Investments RSC Ltd. investing $2.2 billion in cash to subscribe for 294 million new shares of class A stock at a share price of $7.50 in a deal expected to close next week.

Following the latest December investment, CYVN will own around $20.1% of NIO’s stock.

The Shanghai-based smart electric vehicle manufacturer previously reported that in July it received a $738.5 million equity investment from CYVN, which also acquired an aggregate $350 million of NIO class A shares from an affiliate of Tencent Holdings Ltd.

NIO’s common stock finished Tuesday up 5.63% to $8.82, off the day’s low of $8.52 and near the session’s high range of $8.90.

PG&E stronger

PG&E’s 4.25% secured convertible notes due 2027 also made further gains over the session in strong secondary supply after picking up 0.25 point in early trading Tuesday, a source reported.

The noes went out more than 0.5 point better and trading with a 103-handle versus an equity price of $17.58 on $17 million of action.

Around an hour into the session Tuesday, the bonds were more than 0.25 point better at 102.875 with an equity price of $17.47 on $4 million of trading.

PG&E sold $2.15 billion of the notes, with the greenshoe exercised, in a deal that priced on Nov. 29.

“They priced it very attractively,” a source said. “It traded up to 102 not long after that, so it’s held in there.”

PG&E’s common shares closed Tuesday 1.73% better and near the day’s high range at $17.62. The stock traded from $17.37 to $17.66 over the session.

Mentioned in this article:

NIO Inc. NYSE: NIO

PG&E Corp. NYSE: PCG

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