The electric car manufacturer Rivian has announced the issuance of a green convertible bond with a volume of $1.5 billion. Investors react with frustration and send Rivian shares plummeting in over-the-counter trading.
• Rivian wants to issue green convertible bonds
• Conversion into shares dilutes the share of existing investors
• Expert still sees step as positive
The electric car manufacturer Rivian wants to raise fresh money through a green convertible bond. As “Bloomberg” reports, the Tesla competitor submitted a corresponding document on Wednesday, according to which green convertible bonds with a volume of 1.5 billion US dollars are to be issued to “qualified institutional buyers” as part of a private placement. According to the news site, they also have the option to purchase additional bonds with a total value of $225 million. The Bonds, which are senior unsecured obligations, mature in October 2030. As Reuters reports, investors can then choose whether they want to convert the bonds into Rivian shares or receive a cash payment.
Additional financial resources for the introduction of the R2 platform
As a Rivian spokesman told Reuters, the current offer is intended to “reduce the risk of introducing the R2 in Georgia.” For the same purpose, the electric car manufacturer had already issued similar bonds worth $1.3 billion in March. “Our primary goal is to maintain a conservative balance sheet,” the company spokesman continued. Rivian is currently burning a lot of money to boost production numbers – but with visible success. According to Reuters, Rivian delivered 15,564 electric cars in the third quarter, beating analysts’ expectations of 14,740 vehicles. At the beginning of 2026, Rivian also wants to expand its range and – in addition to the already available electric pick-up R1T and the electric SUV R1S – launch the first vehicles based on the R2 platform.
The fact that the company is relying on green bonds in order to secure itself financially for the launch of the R2 vehicle family is probably not only due to its image as an electric car manufacturer. According to Reuters, green bonds also enable companies to raise money on more favorable terms, as investors accept lower returns in exchange for supporting green projects. As “Investor’s Business Daily” reports, the new green convertible bonds will now be used to “fully or partially finance, refinance or make direct investments in” one or more new or recently completed eligible green projects.
Shareholders respond to Rivian’s financing plans with sales
For existing shareholders, however, the issuance of convertible bonds is usually viewed negatively, as these lead to a dilution of their share in the company when converted into shares. Accordingly, Rivian investors reacted anything but pleased and sent the share price down 12.36 percent to $20.76 in Thursday trading on the NASDAQ.
However, despite the expected negative impact on Rivian’s share price, experts can also see something beneficial in the move. Ivana Delevska, CIO of Spear Invest, described the measure to “Reuters” as “sensible”. The market expert, whose investment company itself holds Rivian shares in one of its ETFs, viewed it as positive that they would rather “play it safe” because the market could get very tight.
Editorial team finanzen.net
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