Rivian Pulls $1.0 Billion From Volkswagen Loan, Backed Only By Its Half Of The Joint Venture
The 10-year loan carries a 6.03% fixed rate and is non-recourse, so the lender's only claim is the 50% joint venture stake.
Rivian received the full $1.0 billion from its committed 10-year term loan from Volkswagen Group, according to an 8-K filed Wednesday. The loan is non-recourse to Rivian and secured only by the company's 50% stake in their joint venture.
What the 8-K says
The filing, under Item 2.03 (the section for new direct financial obligations), says the facility carries a 6.03% fixed annual interest rate. The collateral is the 50% equity interest in the joint venture, held by Rivian JV SPC, LLC, a wholly owned Rivian subsidiary.
Rivian announced the funding on Wednesday, which the filing calls the Funding Date. Both loan agreements were first disclosed in a Form 8-K filed November 12, 2024, and each committed $1.0 billion. Both have now been drawn in full.
The structure uses two loans. In Loan A, the joint venture borrows from Volkswagen Specter LLC at 5.93%. The venture then lends the same proceeds to Rivian's subsidiary in Loan B at 6.03%, and the subsidiary distributes the cash to Rivian.
Rivian says it intends to use the money for general corporate purposes.
How the risk is limited
Neither loan is guaranteed by Rivian or anyone else. Rivian is a party to the Loan B agreement only for certain limited agreements, representations and warranties.
The filing says the sole recourse for a default under Loan B is the collateral, and that the company has no liability under it. Loan A is secured by all the joint venture's assets, while Loan B is secured only by the equity interests Rivian's subsidiary owns in the venture.
Loan B can be prepaid without premium or penalty on prior written notice. A Loan B prepayment triggers a mandatory matching prepayment on Loan A, or whatever amount pays Loan A off in full.
Loan B also carries extra covenants generally consistent with those in Rivian's senior secured asset-based revolving credit facility.
Repayment schedule
Interest on both loans is paid twice a year. The first payment is due on the second anniversary of the funding date.
Principal repayments start on the third anniversary: $100.0 million a year on each loan, in $50.0 million installments twice a year. The remaining balance is due at maturity on October 7, 2036.
The filing expects the joint venture to use Rivian's Loan B interest and principal payments to cover the matching Loan A payments to Volkswagen's lender, and for general corporate purposes.
The first interest payment is not due until the second anniversary of the funding date, and the first principal installment waits until the third.
Sources
- 8-K Filing — Rivian Automotive, Inc. / DE (RIVN) — SEC EDGAR
