Morning Commentary: Tesla’s short-dated notes firmer as investors eye maturity ahead

By Rebecca Melvin

New York, July 24 – The convertibles of Tesla Inc. were in focus and holding in on Tuesday as investors eye the upcoming maturity of the Tesla convertibles on Nov. 1, a New York-based trader said.

“Nothing is particularly active. But the short-dated ones are better bid as some people are defending the front end,” the trader said.

The Tesla 2.75% notes due 2018 were seen at about 98 given concerns regarding the ongoing viability of SolarCity Corp. If there were no concerns those notes would be trading at about 99.75, the trader said.

The 2018 notes were originally issued by SolarCity and are now convertible into shares of Tesla, following the companies’ merger.

Tesla came under pressure on Monday after news reports that the Palo Alto, Calif.-based electric car maker has asked at least one supplier to return a significant portion of its payments since 2016 to help Tesla’s current financial position.

Tesla shares were last down $6.41, or 2.2%, at $296.68, extending a 3.3% drop on Monday.

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