• 4 minute Hey Oil Bulls - How Long Till Increasing Oil Prices and Strengthening Dollar Start Killing Demand in Developing Countries?
  • 8 minutes Could oil demand collapse rapidly? Yup, sure could.
  • 15 minutes Oil and Trade War
  • 5 hours Could oil demand collapse rapidly? Yup, sure could.
  • 11 hours Are EVs Safer Than Combustion Engine Vehicles?
  • 7 hours What If Canada Had Wind and Not Oilsands?
  • 2 hours U.S. Withdraws From U.N. Human Rights Council
  • 9 hours Oil prices going down
  • 57 mins Gazprom Exports to EU Hit Record
  • 9 hours Russia, Saudi Push For Big Hike In Oil Output Despite Iran Opposition
  • 18 mins EVs Could Help Coal Demand
  • 13 hours Sell out now or hold on?
  • 13 hours Migrants: Italy Wants EU Border Agency In Africa, Not At Sea
  • 15 hours Nopec Sherman act legislation
  • 16 hours Trump Hits China With Tariffs On $50 Billion Of Goods
  • 9 hours Australia mulls LNG import
  • 2 hours Lloyd's of London excludes coal
  • 9 hours Oil and Trade War
  • 9 hours WE Solutions plans to print cars
The Decisive Battle For Yemen’s Oil Port

The Decisive Battle For Yemen’s Oil Port

Saudi Arabia and its Arab…

China’s Oil Demand Could Take A Big Hit

China’s Oil Demand Could Take A Big Hit

In the last three years…

Zainab Calcuttawala

Zainab Calcuttawala

Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on…

More Info

Tesla Plans To Issue $1.5B In Junk Bonds To Ramp Up Model 3 Production

Tesla

Tesla’s newest stunt to raise capital for the production of Model 3 will lead it to issue $1.5 billion in high-yield junk bonds, according to a new report by Reuters.

Road-shows for the much-awaited vehicle are due to begin on Monday, an official IFR report said.

The Model 3, Tesla’s $35,000 mass market electric car, is expected to be an international success. Anticipation of its release has buttressed the company’s market value to above that of American manufacturers General Motors and Ford.

Equity offerings and convertible jobs have been Tesla’s primary source of new capital so far, but that strategy had an expiry date. Expendable equity characteristically runs out.

The bond issue earned a “B-“ rating from Standard & Poor’s – identical to the company’s credit rating from the same agency.

“We could lower our ratings on Tesla if execution issues related to the Model 3 launch later this year or the ongoing expansion of its Models S and X production lead to significant cost overruns," S&P said in a statement after the bonds were announced.

Moody’s rated the bonds B3, without adjusting the corporate credit rating.

"The major challenge facing the company during the next twelve months will largely be the considerable execution risks associated with the rapid ramp-up in production of a totally new vehicle," the agency’s senior vice president Bruce Clark said in a statement.

Related: Is The Shale Rebound Causing A Return Of Flaring?

Credit investors are due to price Tesla’s bonds later this week based on financial statements and borrowing history. The issue will attract environmentally conscious investors who have boarded the “green bond” train.

The first of 500,000 model 3 deliveries are slated for some time between November 2017 and January 2018, according to estimates from late last month. Tesla handed over 30 Model 3 cars to employees in July.

By Zainab Calcuttawala for Oilprice.com

More Top Reads From Oilprice.com:


x

Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News