Rivian Automotive Inc (NASDAQ:RIVN) shares are trading lower by 11.2% to $17.06 over the trailing five sessions. The stock has dropped this week amid a broader decline in the EV industry, following Tesla Inc’s disappointing third-quarter financial results.
A rise in Treasury yields has weighed on growth stocks in recent sessions. Rivian stock has also fallen roughly 24% in October after the company priced its previously announced $1.5 billion green convertible senior notes offerings.
Why Rivian Has Seen Weakness In October
Rivian’s recent issuance of convertible senior notes has increased its debt burden, which has raised concerns among investors. This added debt could potentially affect the company’s ability to meet its financial obligations and impact its creditworthiness, potentially leading to higher interest expenses and reduced profitability.
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What Investors Should Know
Rivian is offering senior, unsecured notes with a 3.625% annual interest rate, making semi-annual payments starting in 2024 and maturing on October 15, 2030. They can be converted under specific conditions before July 15, 2030, and later at the discretion of noteholders.
Conversion yields cash, Rivian common stock or a combination at an initial rate of 42.9290 shares per $1,000 note principal, equivalent to $23.29 per share, offering a 27.5% premium over the stock price on October 5.
The conversion rate may be adjusted due to certain events. The proceeds will be used for environmentally friendly projects, aligned with Green Bond Principles, 2021.
According to data from Benzinga Pro, Rivian has a 52-week high of $36.45 and a 52-week low of $11.68.
