Chinese EV Maker Nio's Challenges Bleed Into Its Bond Prices
A rally in the price of Nio Inc. 's convertible bonds isn't enough to allay concerns over the Chinese electric vehicle maker's financial health, analysts say.
Nio's 3.875% US dollar notes due 2029 have risen this week, buoyed by positive sentiment surrounding the sector as auto executives from around the world gather in Shanghai for the nation's premier car show. But only earlier this month they were at 67.65 cents on the dollar — a level widely considered distressed and the lowest in seven months.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Chicago Tribune
37 minutes ago
- Chicago Tribune
Oil flip-flops and shares are mixed after the US strikes Iranian nuclear sites
BANGKOK — Global markets appeared to take the U.S. strike against nuclear targets in Iran in stride as investors watched Monday to see how Iran will react. The price of oil initially jumped more than 2%, fell and then regained about half that much. U.S. stock futures edged lower and share benchmarks in Europe and Asia also were mostly lower. The attacks on three Iranian sites raised the stakes in the war between Israel and Iran and left questions about what remains of Tehran's nuclear program. It also increased the possibility that Iran might retaliate, potentially disrupting shipping through the narrow Strait of Hormuz, a waterway through which much of the world's crude oil passes. The big unknown is what Iran will do, analysts said. The price of Brent crude oil, the international standard, was up 1.2% at $77.91 per barrel. U.S. benchmark crude climbed 1.3% to $74.79. The future for the S&P 500 was little changed, while that for the Dow Jones Industrial Average was down 0.1%. Treasury yields were steady. In Europe, Germany's DAX lost 0.5% to 23,230.54 and the CAC 40 in Paris fell 0.6% to 7,541.25. Britain's FTSE 100 shed 0.2% to 8,761.53. Overall, there was no sign of panic. 'I believe what we are thinking is or the thinking is that it is going to be a short conflict. The one big hit by the Americans will be effective and then we'll get back to sort of business as usual, in which case there is no need for an immediate, panicky type of reaction,' said Neil Newman, managing director of Atris Advisory Japan. The conflict began with an Israeli attack against Iran on June 13 that sent oil prices yo-yoing and rattled other markets. Closing off the Strait of Hormuz would be technically difficult but it could severely disrupt transit through it, sending insurance rates spiking and making shippers nervous to move without U.S. Navy escorts. As a major oil producer, Iran may be reluctant to close down the waterway, which is used to transport its own crude, mostly to China. Oil is a major revenue source for the regime. 'The situation remains highly fluid, and much hinges on whether Tehran opts for a restrained reaction or a more aggressive course of action,' Kristian Kerr, head of macro strategy at LPL Financial in Charlotte, North Carolina, said in a commentary. Speaking to Fox News on Sunday, U.S. Secretary of State Marco Rubio said disrupting traffic through the strait would be 'economic suicide' and would elicit a U.S. response. 'I would encourage the Chinese government in Beijing to call them about that because they heavily depend on the Strait of Hormuz for their oil,' Rubio said. When asked about that at a routine briefing in Beijing, Chinese Foreign Ministry spokesperson Guo Jiakun told reporters in Beijing that 'China is willing to strengthen communication with Iran and relevant parties to continue playing a constructive role in promoting de-escalation' of the conflict. 'The Persian Gulf and its adjacent waters are important international channels for cargo and energy trade. Maintaining security and stability in this region serves the common interests of the international community,' he said. Tom Kloza, chief market analyst at Turner Mason & Co said he expects Iranian leaders to refrain from drastic measures and oil futures to ease back after the initial fears blow over. Disrupting shipping would be ' a scorched earth possibility, a Sherman-burning-Atlanta move,' Kloza said. Writing in a report, Ed Yardeni, a long-time analyst, agreed that Tehran leaders would likely hold back. 'They aren't crazy,' he wrote in a note to investors Sunday. 'The price of oil should fall and stock markets around the world should climb higher.' Other experts weren't so sure. Countries are not always rational actors and Tehran could lash out for political or emotional reasons, said Andy Lipow, a Houston analyst who has covered oil markets for 45 years. 'If the Strait of Hormuz was completely shut down, oil prices would rise to $120 to $130 a barrel,' Lipow said. That would translate to about $4.50 a gallon at the pump and hurt consumers in other ways, he said. Much of East Asia depends on oil imported through the strait. Taiwan's Taiex fell 1.4% while the Kospi in South Korea slipped 0.2%. In Tokyo, the Nikkei 225 edged 0.1% lower, with gains for defense contractors, oil companies and miners helping to make up for broad losses. 'The U.S. strike on Iran certainly is very good for defense equipment,' Newman of Atris Advisory said, noting that both Japan and South Korea have sizable military manufacturing hubs. Australia's S&P/ASX fell 0.4%. Hong Kong's Hang Seng regained lost ground, climbing 0.7%, while the Shanghai Composite index picked up 0.7%. In currency dealings, the U.S. dollar rose to 147.82 Japanese yen from 146.66 yen. The euro fell to $1.1464 from $1.1473.
UPI
an hour ago
- UPI
Britain, U.S. warn Iran against Strait of Hormuz blockade
U.S. Secretary of State Marco Rubio (R) and Britain's Foreign Secretary David Lammy (L) at a meeting at NATO Headquarters in Brussels in April. File Photo by NATO/UPI | License Photo June 23 (UPI) -- Britain cautioned Iran Monday that attempts to block the Strait of Hormuz or to strike at American military facilities in the Middle East could lead to escalation, even as Israel continued its strikes on Iran. British Foreign Secretary David Lammy said Monday that such actions would be a "catastrophic mistake." "It would be a huge, catastrophic mistake to fire at U.S. bases in the region at this time. We have forces in the region at this time," said Lammy in an interview with BBC Breakfast. The Iranian parliament moved Sunday to approve a measure to close the Strait in response to the American strikes on Iran over the weekend. The strait serves as a critical route for oil being shipped from Persian Gulf countries, but ultimately it will come down to whether Iran's Supreme Leader Ayatollah Ali Khamenei decides to move forward with such a plan. Close to 30% of the world's seaborne oil shipments are moved through the strait. U.S. Secretary of State Marco Rubio also commented Sunday against Iranian interference with movement through the strait. He spoke with Fox News and called on China to prevent Iran from closing the Strait of Hormuz. "I encourage the Chinese government in Beijing to call them about that, because they heavily depend on the Straits of Hormuz for their oil," said Rubio, as China is a key oil customer of Iran. "The Persian Gulf and nearby waters are important route for international trade in goods and energy. Keeping the region safe and stable serves the common interests of the international community," Chinese Foreign Ministry Spokesperson Guo Jiakun said in a press conference Monday. "China calls on the international community to step up effort to promote de-escalation of the conflict and prevent the regional turmoil from having a greater impact on global economic growth." Meanwhile, Israel Defense Forces announced Monday on social media that it "struck routes in order to obstruct access" to the Fordow nuclear enrichment site in Iran's Qom province. The IDF also proclaimed it attacked six Iranian airports "across western, central, and eastern Iran, destroying runways, underground hangars, refueling aircraft, F-14, F-5 and AH-1 aircraft." It further alleged the strikes "impaired takeoff capabilities from these airports, as well as the Iranian military's ability to operate its air force from them."
Yahoo
an hour ago
- Yahoo
Nio (NIO) Could Climb 33% as Goldman Sachs Lifts Rating and Price Target
Goldman Sachs upgraded Chinese electric vehicle maker Nio (NIO, Financials) to Neutral from Sell and raised its 12-month price target to $3.80 from $3.70, citing recent cost-cutting measures and a decline in share price. The updated target implies a potential upside of about 9% from current levels. Warning! GuruFocus has detected 3 Warning Signs with NIO. Goldman Sachs analyst Tina Hou noted that Nio's efforts to reduce operating expenses by 20%25%including project cancellations, staff reductions, and streamlined operationscould support margin improvement of 4%10% over the next three years. Nio has faced challenges, including widening losses, a 21% year-to-date share price drop, and heightened competition from Tesla (TSLA, Financials) and BYD. Despite the upgrade, Goldman Sachs remains cautious. It cited weak demand, a high debt load, and reduced delivery expectations as ongoing risks. Nio's cash and investments declined from $5.7 billion to $3.6 billion in Q1 2025, underscoring balance sheet concerns. Wall Street maintains a Hold consensus on Nio stock, with two Buy, seven Hold, and one Sell ratings over the past three months. The average analyst price target is $4.58, suggesting a 33% upside. This article first appeared on GuruFocus. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
