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Tesla Inc (TSLA) Raises $1.8B In First Bond Sale, At Record Low Yield

TSLA – Company has agreed to issue and sell $1.80 bln of senior notes due in 2025 – representing a 20% upsize from $1.5 bln senior notes offering announced Aug 7.


Tesla Inc (NASDAQ:TSLA) has managed a feat that no other company in history has been able to accomplish.

The electric carmaker, capitalizing on public fascination with its growth potential, raised a massive amount of money through a bond sale that featured the lowest yield in history based on the duration and credit quality of the debt. Bloomberg has more:

Musk’s electric-car maker Tesla Inc. raised $1.8 billion in its debut bond sale on Friday, boosting the amount by $300 million to meet demand. The eight-year bonds were priced at a record-low yield of 5.3 percent — a touch higher than initial talk of 5.25 percent. They’ll help fund the ambitious rollout of the Model 3, the linchpin of Musk’s plans to turn Tesla into a mass-market vehicle maker.

Demand is no problem for Tesla, with almost half a million current reservations, according to Musk. The real hurdle for Tesla’s chief executive officer will be to produce the vehicle on a scale that the automaker has never come close to achieving before. Musk himself told employees last month, “we’re going to be in production hell” trying to ramp up output in the second half.

While demand for the new, affordable Model 3 sedan has been robust, the company needs oodles of cash to actually produce the vehicles. For now, the public seems more than happy to provide it with as much money as needed — and not even ask for a fair return on their money. That’s a luxury no other company can claim, and gives it a massive leg up on its competition.

The overall frothiness of the high yield bond market is undeniable, but Tesla’s head-shaking bond sale here just might mark the top.

Tesla Inc shares closed at $357.87 on Friday, up $2.47 (+0.69%). Year-to-date, TSLA has gained 67.47%, versus a 10.22% rise in the benchmark S&P 500 index during the same period.

TSLA currently has a StockNews.com POWR Rating of B (Buy), and is ranked #6 of 25 stocks in the Auto & Vehicle Manufacturers category.

TSLA at a Glance

TSLA Current POWR Rating™
Overall POWR Rating™
TSLA Current Price $342.75 1.36%
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TSLA Price Reaction

The day of this event (Aug. 12, 2017)
TSLA Closing Price$363.80 1.66%
TSLA Volume4,519,100
19.04% from avg
Leading up to this event
TSLA 1-mo return8.60%
After this event
TSLA 1-day return1.23%
TSLA 3-day return1.69%
TSLA 5-day return4.41%

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