Gary Zhou 
Key Points
- 💰 Rivian plans to offer $1.5 billion in green convertible senior notes to qualified institutional buyers.
- 📆 The notes are due by October 15, 2030, with an option for buyers to purchase an additional $255 million principal amount of notes within 12 days of issuance.
- 💱 Noteholders can convert notes under specific conditions, with conversion settlements in cash, Class A common stock, or a combination of both.
- 🗓️ The notes can be redeemed in part or in whole for cash starting on October 20, 2027, if Rivian’s common stock exceeds 130% of the conversion price.
- 🌿 Rivian’s convertible senior notes align with Green Bond Principles, supporting green projects like clean transportation and renewable energy.
- 🚗 Rivian reported strong Q3 2023 performance with 15,564 deliveries but maintained its 2023 guidance at 52,000 units, disappointing analysts who expected higher production.
Rivian announced its plans to offer $1.5 billion green convertible senior notes to qualified institutional buyers in a recent securities filing.
On Wednesday, Rivian announced it would offer $1.5 billion in green convertible senior notes due by October 15, 2030. The company also provided interested buyers an option to purchase up to an additional $255,000,000 principal amount of notes—for settlement within 12 days from and including the date the notes are issued.
Noteholders will have the right to convert notes under specific circumstances and periods. Rivian will settle conversions through payment or delivery of cash, shares of Class A common stock, or a combination of the two previous options.
The notes will be redeemable in whole or in part for cash at Rivian’s option on or after October 20, 2027, and on or before the 20th scheduled trading day immediately before the maturity date. Noteholders may only redeem their green convertible senior notes on those dates if Rivian’s common stock exceeds 130% of the conversion price for a specified period. The redemption price will be equivalent to the principal amount of the notes plus accrued and unpaid interest.
Senior convertible notes have priority over all other debt securities issued by the same company. Through senior convertible notes, investors gain two benefits compared to a regular bond issue: 1) a call option and 2) a priority for recourse if the issuing company goes bankrupt. The noteholder is also offered lower interest with senior convertible notes compared to other bonds.
Rivian’s convertible senior notes align with the Green Bond Principles, ensuring that proceeds go to green projects like clean transportation or renewable energy. The EV startup currently produces the all-electric R1T pickup truck and the R1S SUV. It also manufactures Amazon’s electric delivery van.
Rivian smashed Q3 2023 expectations with 15,564 deliveries, beating analyst estimates. The company maintained its 2023 guidance of 52,000 units, which it increased from 50,000 in the second quarter. Rivian’s updated 2023 guidance disappointed analysts who projected the company would be producing more vehicles by now. The company has struggled to ramp production but has consistently beat delivery expectations this year.
