Midday Commentary: Teslas slip below par on debut, flat dollar neutral; existing Tesla weaker

By Rebecca Melvin

New York, Feb. 28 - Tesla Motors Inc.'s newly priced 0.25% convertibles and 1.25% convertibles slipped below par early Friday on their debut in the secondary market, but they were flat on a dollar-neutral, or hedged, basis after the Palo Alto, Calif.-based electric car maker priced an upsized $2 billion of the five-year and seven-year notes at the rich end of talk late Thursday, market players said.

The longer-dated seven-year notes were upsized to $1.2 billion from $800 million, but they were trading slightly less actively than the shorter tranche, at about 99.25 early Friday, according to Trace data.

The 0.25%, five-year notes for $800 million were seen printing at 99.56, according to Trace.

Tesla shares were down about $6.00, or 2.4%, at $246.50.

"They are definitely below par," a New York-based trader said of the new notes. "The stock is down; it was a big deal, and people are pretty much satiated. So they are just following the stock around dollar neutral."

The older Tesla 1.5% convertibles slipped another 1.5 points on an outright basis to 207ish. But the convertibles were holding in on a dollar-neutral basis after coming in 0.25 point to 0.5 point on hedge on Thursday.

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