JPMorgan Chase & Co. is main a possible high-yield bond sale for digital automobile producer Rivian, partly to refinance its upcoming debt, in response to folks aware of the transaction.
The corporate goals to boost as a lot as $2 billion, partly to switch present bonds that mature in 2026, mentioned the folks, who weren’t approved to debate the matter publicly. JPMorgan is sounding out buyers on the bond deal, with early pricing discussions round 10%, and a transaction might launch as quickly as subsequent week, mentioned the folks.
A JPMorgan consultant declined to remark, whereas Rivian’s didn’t instantly reply to a request. The deal continues to be within the dialogue section and will not occur as deliberate, if in any respect, the folks cautioned.
The U.S. junk-bond market has shrugged off a spike in jobless claims to rally for 3 straight classes. A dip in all-in yields has revived urge for food for brand spanking new offers currently after transactions floor to a close to halt in April.
The potential debt deal for Rivian, in the meantime, comes after the corporate mentioned full-year deliveries will decline extra sharply than anticipated only a month earlier. That’s due partly to dangers that President Trump’s commerce warfare will weaken demand for electrical automobiles. Rivian now expects to promote 40,000 to 46,000 battery-powered pickups, SUVs and supply vans this yr, the corporate mentioned throughout its first-quarter outcomes name.
Trump’s commerce insurance policies, together with a 25% levy on imported automobiles and ancillary elements, have prompted automakers all over the world to revise their earnings expectations. Rivian Chief Govt Officer RJ Scaringe mentioned tariffs might improve the corporate’s prices by a couple of hundreds {dollars} per automobile.
Rivian builds all of its vehicles in the US and mentioned a majority of its elements — excluding battery cells — come from the U.S. or adjust to a free-trade settlement spanning North America.
The corporate raised about $1.25 billion in bonds in 2021.
Shah, Weinman and Graf write for Bloomberg.
