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Investing.com -- Rivian Automotive Inc. (NASDAQ:RIVN) shares fell 2.6% following news that the electric vehicle maker is considering a high-yield bond sale led by JPMorgan Chase & Co. (NYSE:JPM) The move is part of an effort to refinance its upcoming debt, with plans to raise as much as $2 billion to replace existing bonds maturing in 2026.
The potential transaction, still in the discussion phase, could launch as early as next week, according to a report from Bloomberg News, citing sources. Early pricing discussions suggest an interest rate around 10%, although the deal may not proceed as planned, or at all, according to sources not authorized to speak publicly. JPMorgan has declined to comment, and Rivian has not yet responded to requests for comment.
The market’s reaction reflects concerns over the cost of new debt for Rivian, as the 10% interest rate being considered is notably high. This suggests investors may be wary of the risks associated with the company’s financial strategy, particularly as it seeks to refinance its existing obligations amidst a challenging economic environment for the electric vehicle industry.
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