Following pursues Hong Kong and Singapore Secondary listings, NIO, which Ford CEO Jim Farley called “must be defeated” recently, announced earlier that its financial leasing subsidiary, NIO Financial Leasing Co Ltd, has successfully issued 1.03 billion RMB in Asset-backed Medium-term Notes (ABNs) in China’s interbank market, the first of its kind in the country’s new energy vehicle sector.
Despite the fact that NIO is not listed on the Chinese mainland’s stock exchanges, NIO stated on October 29 of last year that its financial leasing company has successfully issued Asset-backed securities (ABS) for NEV leasing on the Shanghai Stock Exchange, marking them the first foray into Chinese capital markets.
Following last year’s experience, NIO Financial Leasing Co Ltd hired Shanghai Bank as the lead underwriter for ABN this time. Asset-backed notes (ABN) are one of the asset-backed securities. It refers to the securitization financing that non-financial enterprises issue in the inter-bank bond market through issuing vehicles for the purpose of financing, and is backed by the cash flow generated by the underlying assets as repayment, and it is agreed to repay the principal and interest within a certain period of time. This method can revitalize existing assets and increase financing channels. At the same time, since the credit status of the underlying assets and the investors are independent of each other, a higher credit rating can be obtained through internal and external credit enhancement arrangements, thereby achieving a lower issuance rate, thereby reducing financing costs. The total project scale is 1.03 billion yuan, and the coupon rate of priority A grade is 2.89%. All the funds raised will be used for NIO’s smart electric vehicle business.
Both actions demonstrate NIO’s active attempts to raise funds in the interbank market. These marking that NIO has completed the establishment of financing channels in the exchange market, further assisting the company in all prospects.
