Nio Inc., the Chinese electric vehicle (EV) manufacturer, announced on Wednesday that it has successfully raised $1 billion through a two-tranche convertible bond offering. The primary purpose of this fundraising is to pay down existing debt and enhance the company’s financial stability.

The convertible bond offering consisted of two segments, each raising $500 million. The first segment is a six-year put-four convertible bond, while the second is a seven-year put-five convertible bond. Both bonds are categorized as senior and unsecured notes. The shorter-term bond carries an interest rate of 3.875%, while the seven-year bond has a rate of 4.625%, as disclosed by Nio in a statement on the Hong Kong Stock Exchange.

Nio’s intended use of the net proceeds from this bond offering includes the repurchase of a portion of its existing debt securities, further strengthening its financial position, and general corporate purposes.

Additionally, Nio recently announced plans to launch its first self-developed mobile phone, aimed at enhancing the software and connectivity aspects of its vehicles to improve their overall appeal.

In terms of financial performance, Nio reported a net loss of 6.12 billion yuan (approximately $839.51 million) in the second quarter, compared to a loss of 2.75 billion yuan during the same period in the previous year.