JPMorgan Chase & Co. is leading a potential high-yield bond sale for electric vehicle manufacturer Rivian, aiming to raise up to $2 billion. The company plans to use the funds to refinance its existing debt, including bonds that mature in 2026. Early pricing discussions for the bond deal are around 10%, and a transaction could launch as soon as next week. However, the deal is still in the discussion phase and may not happen as planned.
The potential debt deal comes after Rivian revised its full-year delivery expectations, citing risks posed by President Trump’s trade war. The company now expects to sell 40,000 to 46,000 battery-powered vehicles this year, down from its previous forecast. Rivian’s CEO, RJ Scaringe, stated that tariffs could increase the company’s costs by a few thousand dollars per vehicle.
Despite the challenges posed by the trade war, Rivian’s production is less affected than other automakers since it builds all its cars in the US and sources a majority of its components from the US or countries with a free-trade agreement. The company raised $1.25 billion in bonds in 2021 and is now seeking to refinance its debt to take advantage of favorable market conditions.
The US junk-bond market has recently rebounded, with yields decreasing and investor appetite for new deals increasing. This has created a favorable environment for Rivian to issue new debt. JPMorgan is sounding out investors on the bond deal, and a successful transaction could provide Rivian with the necessary funds to refinance its debt and support its growth plans.
The deal’s outcome is still uncertain, and the people familiar with the transaction cautioned that it may not happen as planned. However, if successful, the bond sale could provide a significant boost to Rivian’s finances and support its efforts to become a leading player in the electric vehicle market. With the company’s production plans and financials under scrutiny, the outcome of the bond sale will be closely watched by investors and industry observers.