(Yicai Global) Feb.1 — Chinese electric vehicle startup NIO [NYSE:NIO] announced yesterday it will issue USD650 million in convertible bonds, of which tech titan Tencent Holdings will buy USD30 million.

The bond issue reflects capital market optimism about Shanghai-based NIO's development and long-term share price, the company said.

The proceeds will go to service, technology research and development, manufacturing facility development, supply chain promotion, sales and marketing, the e-carmaker announced on Jan. 30.

NIO will grant initial buyers a 30-day option to purchase up to an additional USD100 million of the principal amount of the bonds. 

Units of NIO's major shareholders Tencent Holdings and Hillhouse Capital Management are expected to take up to USD30 million and USD10 million of the instruments, respectively.

The bonds will be senior, unsecured obligations. Convertible into the company's American Depositary Shares, they will mature on Feb. 1, 2024, unless repurchased, redeemed or converted in accordance with their terms prior to such date.

NIO shares [NYSE:NIO] rose 5.77 percent to USD7.88 at the close today.

Editor: Ben Armour